Yash Birla has been banned from the securities markets for two months for mis-utilisation of initial public offering proceeds.

Yash was penalised by SEBI for allegedly diverting inventory market investor funds in the direction of inter-corporate deposits of his personal firm. 

According to reports, an amount of over Rs 30 crore is untraceable.

A Bloomberg report said that Birla and several companies promoted by him were being investigated by the Serious Fraud Investigation Office, the Enforcement Directorate, the Economic Offences Wing of the Mumbai Police, the income tax department and the Securities and Exchange Board of India.

Yash Birla's companies include Zenith Steel, Birla Power, Birla Lifestyle, Shloka Infotech and Birla Cotsyn. Most of these firms are credit score defaulters.
In its probe, SEBI found that company made misstatements in the Rs 65 crore IPO prospectus of Birla Pacific Medspa Limited.

SEBI said that while around 75% of the proceeds were promised to be utilised in setting up of Evolve Med Spa centres under the 'objects of the issue' in the prospectus, no such centres have been set up ultimately. 

Also, 50% of the proceeds or Rs 31.54 crore were deployed as inter-corporate deposits to group companies, out of which 60% of ICD's were never returned to the company.

"The fact that funds of IPO proceeds would be deployed as ICDs to group companies of BPML as against the setting up of Evolve Centers was never disclosed in the prospectus. In fact, the prospectus never contemplated that funds would be deployed as ICDs to group companies within five days from the receipt of IPO proceeds without any event of exigency," Sebi noted.