You are here: Home >> English News & Features >> BUSINESS & ECONOMY

Sebi shells St with curbs on 331 firms

DNMUM394141 | 8/9/2017 | Author : Sumit Moitra | WC :463

  • Packaged Content

  • Note: Buying this story will also give you the same reproduction rights for these images, without any additional cost.

Puts severe trading restrictions; list includes known names such as Parsvnath, Prakash Ind; companies deny charge

Kolkata: In a major jolt to the corporate sector, capital markets regulator Securities and Exchange Board of India (Sebi) on Tuesday suspended daily trading in about 331 listed entities on the suspicion of being shell companies.
These companies include Parsvnath Developers, J Kumar Infraprojects, Orissa Sponge Iron and Steel, Birla Cotsyn, Prakash Industries and SQS India BFSI Ltd.
These 331 companies have been put under the strictest level of Graded Surveillance Measures, grade 6.
“Trading in all such listed securities shall be placed in Stage VI of GSM with immediate effect. 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 from the buyers which shall be retained with exchanges for a period of five months,” the circular issued by BSE following Sebi’s letter on Monday said.
Apart from trading restrictions, exchanges would now start a process of verifying the fundamentals of these companies.
“Exchanges shall appoint an independent auditor to conduct an audit of such listed companies and if necessary, even conduct a forensic audit of these companies to verify its credentials,” the circular said.
The Sebi directive said shares held by the promoters and directors of such companies shall be allowed to be transferred by depositories only upon verification by exchanges.
On verification, if “appropriate credentials/fundamentals” are not found about the existence of the company, exchanges must initiate compulsory delisting of such companies, it said.
While the market reacted negatively to the news, there was mixed response to this sudden initiative.
But for every notorious corporate group found on the list like the Winsome Diamond or Rei Agro, there are several working manufacturing groups like Pincon Spirit or Adhunik Industries.
“We are having six own manufacturing units in the liquor vertical, we are paying government excise duties ranging in crores for running the business,” Pincon Spirit CFO Arup Thakur said in a statement.
“Our company is definitely not a shell company. We plan to write to Sebi on this and would be able to comment further after we get clarifications,” Ankit Patni, director of Rohit Ferro said.
While Pincon Spirit has earned a revenue of Rs 390 crore and profit of Rs 12 crore during the June quarter, indicating it’s not a shell company, Rohit Ferro could manage a topline of Rs 260 crore during the March quarter.
“If some of the firms are found to be not shell companies this order shall still be a death knell on their perception and valuation,” Rajesh Narain Gupta, managing partner, SNG & Partners said.

Copyright restricted. Under license from
Add To Lightbox
Calculate Price


Sensex sheds 311 points, Nifty below 10700-mark
DNMUM432196 | 2/19/2019 12:00:00 AM | Author : DNA Money Correspondent | WC :191

Mumbai: Sensex and Nifty continued to fall on Monday as investor’s remained nervous on foreign fund outflows and geopolitical concerns.
The 30-share Sensex slipped 310.51 points, or 0.87%, ending at 35498.44 while the broader Nifty settled at 106
Add To LightboxCalculate Price

Use a step-up SIP to match your income
DNMUM432197 | 2/19/2019 12:00:00 AM | Author : Sandeep Bhardwaj | WC :801

Over the last three years the average Systematic Investment Plan (SIP) collection per month has almost doubled. During the year 2017-2018, SIP contribution accounted for around Rs 67,000 crore and the total number of active SIPs accounts sto

Add To LightboxCalculate Price

Daimler India drives in first profit in 4 years on volume push
DNMUM432198 | 2/19/2019 12:00:00 AM | Author : Shahkar Abidi | WC :238

Mumbai: Four years after calling itself financially ‘sick’, Daimler India Commercial Vehicles (DICV), reported its first profit during the year 2018. Though the company did not disclose its profit figures, its sales volume grew by 35% in 201

Add To LightboxCalculate Price

‘We will be considering Arcelor’s Essar offer’
DNMUM432199 | 2/19/2019 12:00:00 AM | Author : Sanjay Jog | WC :596

Power Finance Corporation (PFC) hopes to start a new inning in the power sector after the acquisition of Rural Electrification Corporation. In an interview with DNA Money, PFC CMD Rajeev Sharma told Sanjay Jog that the PFC-REC deal will create
Add To LightboxCalculate Price