To
All Trading Members of the Exchange
Sub: Suspension of companies as a Surveillance measure
Trading Members are aware that, in past, SEBI had passed several orders against the concerned parties/companies, inter alia, in relation to unusual price movements vis -a- vis preferential issue price and weak financials of the company. In addition to aforesaid, Trading Members are also aware that the Exchange had suspended trading in the securities of various companies on account of surveillance reasons.
It is noticed that there has been substantial increase in manipulation/abrupt movement in the prices of securities wherein common modus operandi is through the route of preferential allotment.
While the Exchange, from time to time, has taken requisite steps to detect and contain such instances, it is felt necessary that further pre-emptive measures should be adopted to curtail misuse of the Exchange’s system.
Accordingly, various enhanced surveillance measures such as reduction in price band, suspension in the trading of securities, etc., will be adopted by the Exchange.
In furtherance of aforesaid course of action and as a preventive measure, trading in the securities of companies shall be suspended satisfying the parameters of the Exchange which includes preferential allotment done in past few years; pursuant to the provisions of Rules, Bye-laws and Regulations of the Exchange (Bye-law 21).
Trading in the securities of such companies shall be suspended till such time the company submits the following –
An Auditor certificate, confirming each of the following and duly supported by the documents relied upon, with regard to the preferential issue(s) made by the company:
i) Amount raised under each of the preferential issue
ii) What was the object of raising the fund
iii) How the preferential issue benefitted the company
iv) There is no mis-utilization of funds raised under preferential basis. To be duly supported by bank statement of the company.
v) Money raised as above has not been transferred back to the preferential allottees/ promoters/ directors directly or indirectly
In case of any discrepancies observed in the auditor certificate in future, same shall be viewed seriously including referring of the case to ICAI.
Names of such companies shall be intimated separately.
All listed companies are also requested to take note of this notice.
In case of any clarifications, Trading Members / Company may contact Mr. Kinnar Mehta (022 – 2272 8083) / Ms. Purnima Kotian (022 – 2272 8795)
For & On behalf of BSE Ltd.
Rajesh Saraf Rajesh Gandhi
Sr. General Manager Assistant General Manager
Surveillance & Supervision Surveillance & Supervision
Date: - December 18, 2015
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