Sebi on Monday directed bourses to initiate action against 331 suspected shell companies that are listed and these scrips will not be available for trading this month, according to a communication.
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 BSE, the NSE and the Metropolitan Stock Exchange, the markets regulator has asked them to keep the 331 shares in stage four of the Graded Surveillance Mechanism (GSM) with immediate effect.
Securities coming in stage four are permitted to trade only once a month under trade to trade category.
Since these shares would be moved to stage four from tomorrow, these securities would not be available for trading this month.
“Trading in these securities shall be permitted once a month (first Monday of the month),” the communication said.
Further, any upward price movement would not be permitted beyond the last traded price while additional surveillance deposit of 200 per cent of trade value would be collected from the buyers. This amount would be retained by the exchanges for five months.
Apart from initiating a “process of verifying the credentials/ fundamentals of such companies”, the exchanges have also been asked to appoint an independent auditor to carry out audit of these entities.
If necessary, even forensic audit could be ordered to verify their credentials and fundamentals.
On verification, if the bourses do not find appropriate credentials or fundamentals about existence of these companies, they proceeding for “compulsory delisting” would be started.