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Sebi whip blocks trade in 331 shell companies


The government crackdown against companies” has hit several investors, funds and small investors, who worth nearly Rs 9,000 crore in these companies.
In a late circular on Monday, market Securities and Exchange Board of (Sebi) directed stock exchanges to immediately restrict trading in 331 companies identified as “shell companies” by the Ministry of Corporate Affairs in consultation with the Serious Fraud Investigation Office (SFIO) and the incometax (IT) department.
While, by definition,a shell company is one without any business operations or assets, several companies with active business dealings too were part list with 331 names.
At least five companies list have market capitalisation (Rs 500 crore each, with diverse shareholding as retail investors.)
These companies placed in the surveillance measure where trading in only onceamonth deposit” of three times the trade value.
Companies, includingJKumar Infraprojects (mcap of Rs 2,150 crore), Prakash Industries (Rs 2,124 crore), Parsvnath Developers (Rs 1,036 crore), and multinational company SQS India BFSI (Rs 535 crore), termed the “shell company” classification as wrongful and urged Sebi and exchanges to reconsider the directions.
“It is hereby clarifiedJKumar is notashell company and the suspicion of the regulator is uncalled for. Our company´s compliance track record, both with the exchanges and Registrar of Companies, has been impeccable,” said the Mumbaibased infra developer, highlighting the various projects it currently working on, including some government contracts.
The Business Standard, New Delhi, 09th August 2017

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