A Dozen Of 162 ‘Shell’ Firms Facing Curbs May Resume Trading In A Week
A dozen of the 162 suspected shell companies may resume trading in a week’s time, a senior government official told BloombergQuint, days after the Securities and Exchange Board of India restricted them to once-a-month trade.
SEBI may soon issue a notification to give the identified shell companies time to explain their position and submit documents to prove their stand.
Action against some of these companies was taken due to the spike in trade found during demonetisation, the government official said. Some of these companies identified by ministry of corporate affairs were found to be violating income tax rules, the official added.
The securities market regulator put 162 listed entities in a restricted trade category on on the basis that they are shell companies as identified by the Ministry of Company Affairs. As of August 8, the shares of these companies could be traded only once every month under the trade-to-trade category with certain other restrictions, SEBI said in a late night communication on August 7. Since that one trading day was the first Monday of the month, trade in the securities of all the affected companies was suspended from August 8 itself. Promoters of these companies cannot sell their shares till the restriction is lifted.
The regulator’s directive came after the corporate affairs ministry shared a list of 331 listed companies that are suspected to be shell entities and could even face “compulsory delisting”, the regulator had said in its communication.
These entities would be subject to independent audit and if required, forensic audits could also be initiated to check their credentials, SEBI had said.
Of the 162, 19 companies have a market capitalisation of over Rs 100 crore each. Some of the prominent ones include J Kumar Infraprojects Ltd., Parsvnath Developers Ltd., Prakash Industries Ltd. and SQS India BFSI Ltd.
NSE To Check Credentials Of 38 Listed Firms
The market regulator directed the National Stock Exchange to check the credentials of 38 companies listed on it, the NSE said in a statement late Wednesday night.
SEBI directed stock exchanges to shift 331 companies to the Graded Surveillance Measure, Stage VI, with immediate effect. Of these 331 companies, only 48 are listed on NSE. Of the 48, 10 companies were suspended prior to this directive of the market regulator.