The suits, filed by retail investors Hemant Kulshrestha and Vinay Bansal, sought to halt or modify the public issue, alleging inadequate and misleading disclosures in the company's offer documents.

Bombay High Court dismisses pleas challenging WeWork IPO, imposes Rs 1 lakh fine

Bombay High Court Dismisses Writ Petitions Against WeWork India IPO

The Bombay High Court has dismissed two writ petitions challenging the Initial Public Offering (IPO) of WeWork India Management Private Limited. The court ruled that the petitions lacked merit, and the suits filed by retail investors Hemant Kulshrestha and Vinay Bansal were unable to halt or modify the public issue.

The core issue of the plea revolved around the alleged non-disclosure of material information concerning the company's promoters, particularly pending criminal and economic prosecutions by agencies such as the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).

Key Points of the Dismissed Petitions:

The petitioners alleged that the company's offer documents contained inadequate and misleading disclosures.
The IPO's structure as a complete Offer for Sale (OFS) was questioned, arguing that since no fresh capital was being raised for the loss-making company, the issue served only as an exit for existing shareholders.
The issuer had an independent regulatory obligation to disclose all prosecutions, irrespective of whether SEBI took action on an individual complaint.

Senior Advocate Shiraz Rustomjee, appearing for the market regulator SEBI, countered that the petitioners were shifting their stand and that the regulator had acted within the prescribed framework.

Decision of the Court:

The bench of Justices RI Chagla and Farhan P Dubash ultimately found no merit in either petition. In its order, the Bench dismissed Kulshrestha’s petition with no order as to costs.

However, the Court took a severe view of the petitioner, Vinay Bansal's, finding him "disentitled to any relief" due to a "deliberate act of suppression" committed during the proceedings.

"It is well settled that a party who approaches the court with unclean hands or by withholding material documents and/or information is disentitled to any reliefs from the court, and on this ground alone, we decline to entertain the writ petition filed by Vinay Bansal and instead dismiss the same with costs of Rs 1 lakh payable to the Maharashtra State Legal Services Authority for this deliberate act of suppression," said the bench.