WeWork IPO Lands In Bombay High Court As Investor Flags Disclosure Lapses, SEBI Inaction

WeWork India Management Ltd., has found itself before the Bombay High Court, alongside the Securities and Exchange Board of India, following allegations of material non-disclosures and regulatory inaction.

The company's IPO opened for investors to bid on Friday and was subscribed 0.06 times as of 12:36 p.m. WeWork India had earlier raised over Rs 1,348 crore from anchor investors on Wednesday, ahead of its initial public offering.

Investor Vinay Bansal has filed a writ petition alleging that the company’s draft red herring prospectus contains misleading statements and significant omissions, including the concealment of a criminal chargesheet filed against its promoters for alleged serious economic offences.

The petitioner has sought directions to SEBI to expeditiously adjudicate his complaint and issue a reasoned and speaking order within a stipulated timeframe. He has also urged the court to direct SEBI to investigate the alleged irregularities and to withhold the listing of securities until the matter is fully resolved.

According to the plea, Bansal had earlier approached SEBI with a detailed complaint outlining “severe deficiencies” in the DRHP — several of which, he claims, persist in the red herring prospectus — including misleading disclosures on brand ownership, a precarious financial position, and suppression of information regarding criminal proceedings against key promoters.

The petition cites Section 11A of the SEBI Act, which empowers the regulator to prohibit a public issue in the interest of investor protection.

“In cases where an offer document contains misleading statements, conceals material facts, or is structured in a manner detrimental to investors, SEBI can invoke its powers under Section 11A to restrain the issue from proceeding,” the petition contends.

It further argues that despite submission of a formal complaint, SEBI has neither issued a final determination nor communicated its reasoning, constituting a violation of its statutory duty to pass a speaking order.

The Bombay High Court is hearing Writ Petition on Oct. 3, involving petitioners Vinay Bansal and Hemant Kulshrestha against SEBI. The matter is being argued by senior advocates before a bench comprising Justice RI Chagla and Justice Farhan Parvez Dubash.