Sebi steps up pressure on shell companies: Full list of 331 suspected stocks under BSE, NSE scanner

Stepping up the pressure on shell companies, Sebi on Monday directed premier stock exchanges to initiate action against 331 scrips which it suspects are such firms.

In a communication to the exchange, the capital market regulator has said these stocks will not be available for trading this month.

Image: News18.com

Image: News18.com

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".


Stepping up the surveillance measures, these entities would be subject to independent audit and if required, forensic audits could also be initiated to check their credentials.

In a communication sent to the Bombay Stock Exchange (BSE), the National Stock Exchange (NSE) and the Metropolitan Stock Exchange, the markets regulator has asked them to keep the 331 shares in stage four of the graded surveillance measures (GSM) with immediate effect.

These measures are taken to alert and advice investors to be extra cautious "while dealing in these securities and advice market participants to carry out necessary due diligence while dealing in these securities".

According to a communication by the Bombay Stock Exchange, under the stage VI of GSM framework, trading in these identified securities shall be permitted only once a month under trade-to-trade category.

"Further, any upward price movement in these securities shall not be permitted beyond the last traded price and additional surveillance deposit of 200 % of trade value shall be collected form the Buyers which shall be retained with Exchanges for a period for five months," the communication said.

Apart from this, the shares held by the promoters and directors in such listed companies shall be allowed to be transferred by depositories only after verification by concerned exchanges. "...They shall not be allowed to transact in the security except to buy securities in the said listed company until verification of credential / fundamental by Exchanges is completed," it said.


The bourses shall initiate a process of verifying the credentials / fundamentals of such companies and appoint an independent auditor to conduct audit of them. The may even conduct a forensic audit of these companies to verify its credentials/fundamentals.

The exchanges will go for compulsory delisting of companies that could not be verified. "...The said company shall not be permitted to deal in any security on exchange platform and its holding in any depository account shall be frozen till such delisting process is completed," the BSE said.

List of 331 Shell Companies - Provided by Sebi to BSE - 07 August 2017 by Firstpost on Scribd

 

Sebi Letter to Exchanges and Depositories on Shell Companies - 7 August 2017 by Firstpost on Scribd

With inputs Kishor Kadam


Published Date: Aug 08, 2017 01:18 pm | Updated Date: Aug 08, 2017 01:18 pm



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