Page 41 - The Insurance Times September 2022

Illegal tie-in agreements, between underwriters & should be compensated for the financial losses they
some investors in return for receiving a favorable sustained for purchasing shares based on the misleading
allocation of shares in the IPO. information. The settlement costs reach more than INR
1000Cr.
Fraudulent use of money raised.
Overcompensated or over matched management.
Redundancy program
Failure to disclose material information.
Shortly after its IPO, a manufacturing company announces
Forward looking statements. a major redundancy program. The company's share price
falls straight after the announcement, resulting in an
Profile and accuracy of resumes of directors and
immediate loss of value to many of the investors in the IPO.
management.
Investors sued the company alleging non-disclosure of this
False promises.
material information in the prospectus and after two years
Quality of investment bank/adviser to the IPO. of civil litigation the manufacturer agrees a settlement
figure of more than INR 100Cr.
Typical Claim scenarios which are
Missed profit targets
covered under POSI -
A construction company issues a prospectus for an IPO which
Failure to adequately inform includes financial forecasts for the forthcoming year. But the
A manufacturing company initiates IPO, but its prospectus company falls well short of its forecasts, issuing several profit
fails to adequately report the poor quality of their assets. warnings and the share price falls dramatically. Investors
Shareholders who purchase rights based on this information who purchased shares based on the prospectus pursue legal
are disappointed when the share price falls following listing. action to recover their losses, citing, amongst other things,
Shareholders take legal action against the company claiming the company, and its directors' misleading and deceptive
that it failed to ensure that the prospectus information was conduct.
not misleading and that it did not omit any information
reasonably required for a shareholder to make an informed Legal Disputes not disclosed
assessment of the company's financial position.
A company withdraws its public rights offer shortly before
it is due to close after regulators receive a complaint that
Overstatement of Financial Information the company had failed to disclose that it was in substantial
A company is alleged to have materially overstated its legal disputes over terminated contracts. It's directors and
financial position in its IPO prospectus. The regulator obtains other individuals involved in preparing the prospectus face
an interim court order to freeze the funds raised in the investigation, legal action and possible civil and criminal
offering. During this time the regulator conducts liabilities for any false and misleading statements made in
investigations and concludes that investors in the company its prospectus.

EU regulator backs use of Novavax COVID shot as a booster
The European Medicines Agency backed the use of Novavax's COVID-19 shot as a booster for adults, ahead of an
anticipated rise in infections this winter. The vaccine, Nuvaxovid, is designed to target the strain of the virus that
originally emerged in China. The EMA's recommendation is for people who previously were inoculated with either the
Novavax shot, or any other COVID vaccine.

Separately, the EMA backed two separate COVID-19 vaccine boosters updated to target the Omicron variant of the
virus. Developed by Moderna and the team of Pfizer and BioNTech, the new so called bivalent shots combat the BA.1
version of Omicron and the original virus first detected in China.
Novavax's Nuvaxovid made its debut well after first set of COVID-19 shots including those from Moderna, Pfizer-
BioNTech, AstraZeneca and Johnson & Johnson were approved in different parts of the world.
The hope was Nuvaxovid would incentivise people who were sceptical of some shots based on the newer mRNA
technology to get vaccinated, given Nuvaxovid relies on technology that has been used for decades to combat diseases
including hepatitis B and influenza.

The Insurance Times, September 2022 41