SEBI Disposes of SCN Against Neomile Corporate Advisory Ltd.

SEBI has issued a detailed order in the matter concerning Neomile Corporate Advisory Ltd., which was alleged to have made misleading disclosures on its website by projecting itself as a SEBI-registered Merchant Banker.

Key Takeaways:

• SEBI’s preliminary examination noted that Neomile acted as an advisor in several SME IPOs and two main board IPOs, while registered Merchant Bankers were responsible for due diligence.

• The company acknowledged that its website erroneously mentioned registration as a Merchant Banker due to migration to a new version in early 2024. The disclosure was corrected immediately upon SEBI’s intervention in September 2024.

• Importantly, SEBI’s own examination admitted that Neomile was not acting as an unregistered Merchant Banker; its role was limited to that of an advisor.

• The order highlights inconsistencies in regulatory approach—while some cases (e.g., Value Square Capital) attracted only monetary penalties, Neomile was issued a much stricter SCN despite corrective steps.

• Citing the principles of proportionality, consistency, and legitimate expectation, SEBI concluded that there was no mala fide intent, fraud, or investor harm.

  
  

Outcome:

The Show Cause Notice has been disposed of without enforcement action.