Description

RTI appeal regarding SEBI's denial of observation letter issued to Imagine Marketing Limited (parent of boAt) concerning discrepancies in their IPO filing documents. SEBI upheld exemption under Section 8(1)(e) of RTI Act citing fiduciary capacity.

Summary

This is an order by the Appellate Authority under the Right to Information Act, 2005, on Appeal No. 6758 of 2026 filed by Rajat Galav against CPIO, SEBI, Mumbai. The appellant sought disclosure of SEBI’s observation letter dated August 1, 2025, issued to Imagine Marketing Limited (parent company of boAt) regarding discrepancies flagged by statutory auditors in their Draft Red Herring Prospectus (DRHP/UDRHP). SEBI denied disclosure, citing that the observation letter is held in fiduciary capacity and is exempt under Section 8(1)(e) of the RTI Act.

Key Points

  • Appellant Rajat Galav filed an RTI application on January 26, 2026, seeking details of SEBI actions against Imagine Marketing Limited related to financial discrepancies in their IPO filings
  • The discrepancies involve mismatches between financial returns filed with banks/lenders and internal account books for FY23, FY24, and FY25
  • SEBI confirmed that discrepancies were disclosed as Risk Factor 9 in the Updated DRHP under “Section II: Risk Factors” and listed among top ten risk factors
  • SEBI issued observations on the Prefiled DRHP via letter dated August 1, 2025
  • The observation letter was denied under Section 8(1)(e) of the RTI Act (fiduciary relationship exemption)
  • Appellant cited RBI vs. Jayantilal N Mistry (2016) 3 SCC 525 in support of disclosure
  • SEBI upheld the denial, maintaining that documents received from regulated entities are held in fiduciary capacity

Regulatory Changes

No regulatory changes. This is a procedural RTI appeal order.

Compliance Requirements

No new compliance requirements. The order affirms SEBI’s existing practice of treating observation letters issued to IPO filers as exempt from RTI disclosure under the fiduciary relationship doctrine (Section 8(1)(e) of RTI Act).

Important Dates

  • January 26, 2026: Appellant filed original RTI application
  • February 17, 2026: SEBI (respondent) responded to RTI application
  • February 17, 2026: Appellant filed appeal (Reg. No. SEBIH/A/E/26/00073)
  • August 1, 2025: SEBI issued observations on Imagine Marketing’s Prefiled DRHP
  • March 16, 2026: Appellate Authority issued this order

Impact Assessment

This order has minimal direct market impact. It is a routine RTI appellate decision affirming SEBI’s standard position that observation letters issued to IPO applicants are held in fiduciary capacity and exempt from public disclosure. Notably, it confirms that Imagine Marketing Limited (boAt’s parent company) has received SEBI observations on its IPO filing as of August 2025, and that financial discrepancies between bank filings and internal accounts for FY23-FY25 have been disclosed as a risk factor in the UDRHP. Investors interested in a potential boAt IPO should note these disclosed risk factors when evaluating the offering.

Impact Justification

Procedural RTI appeal order with no regulatory changes or compliance requirements. Limited market impact as it concerns information access denial rather than substantive regulatory action.