(MENAFN- Live Mint) WeWork's initial public offering (IPO) is facing scrutiny just days before opening for subscriptions after an investor filed a petition before the Bombay High Court against the Securities Exchange Board of India (SEBI), alleging company wrongdoing and the market regulator's failure to act on his complaints.

The petitioner, Vinay Bansal, a 32-year-old resident of Jaipur, claimed that the Draft Red Herring Prospectus (DRHP) contains material non-disclosures and misleading statements, including the concealment of a criminal chargesheet filed against the promoters for serious economic offences.

The investor's claims in the petition

Bansal has further appealed to SEBI to restrain WeWork from proceeding with its IPO until it investigates the allegations and makes a formal judgment.

The petition further claims that Section 11A of the SEBI Act grants SEBI the explicit power to prohibit an issue to protect investors and ensure market integrity.“In case SEBI finds that an offer document contains misleading statements, conceals material facts, or is structured in a manner that could harm investors, it can invoke its powers under Section 11A of the SEBI Act to prevent the issue from proceeding to the market,” the petition said.

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Bansal also claimed that the proceeds from the IPO will not create any tangible assets or business opportunities for the issuer. Instead, it is primarily designed to provide an exit to promoters at the“expense of retail investors”, which in turn violates the principles laid down in SEBI's general order, 2012.

Sebi's inaction

The petitioner has challenged SEBI's inaction on“detailed complaints” he filed against the company planning to go public. The petition mentioned that despite filing a complaint before SEBI, it has neither decided the issue nor passed a reasoned communication, which violates the duty to pass a speaking order.

Bansal had approached SEBI with a complaint outlining severe deficiencies in WeWork's DRHP (which continue to reflect in the RHP as well), including misleading disclosures about brand ownership, a precarious financial position, and concealment of the status and consequences of criminal proceedings involving grave economic offences against its key promoters .

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WeWork India Management was supposed to open for IPO subscriptions on Friday, 3 October 2025, and remain available until Tuesday, 7 October 2025. After the petition, the matter is expected to be taken up for hearing shortly, potentially disrupting the IPO's timing and trajectory.

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