Sub: SEBI directions w.r.t. listed Shell Companies – Update
In continuation with the Exchange notice no. 20181029-18 dated October 29, 2018 informing about process for dealing suspected shell companies, market participants are further directed to take note of the following process for dealing with suspected shell companies not having any operation for a long period:
1. Companies shall be given time of one year from the date of present notice to revive their operations within 1 year and until then trading in the securities of these companies shall continue to remain in Stage VI of GSM framework.
2. During the period of 1 year, if company demonstrates revival of its operations, then following actions shall be initiated:
a. Move out the security of the company out of Stage VI of GSM Framework, post announcement of minimum 2 quarterly financial results which reflects re-commencement of operation by the company.
b. Appoint Independent Auditor to conduct Forensic Audit covering the period of revival of operation
c. Observation of Independent Auditor, if any, shall be dealt in accordance with the process indicated in the Exchange notice no. 20181029-18 dated October 29, 2018.
3. Companies which fail to demonstrate revival of their operations within the stipulated one year period, then trading in the securities of such company shall be suspended, followed by initiation of compulsory delisting process in accordance with provisions of SEBI (Delisting of Equity Shares) Regulations, 2009 read with provisions of Securities Contracts (Regulation) Act, 1956 and Securities Contracts (Regulation) Rules, 1957.
In addition to aforesaid processes, wherever required matter may be referred to SEBI as may be appropriate. It may further be noted that, aforesaid processes does not preclude SEBI / Exchange to take any further action(s), if the facts and circumstances of the case demands so.
All concerned companies and market participants are requested to take note of the present circular.
In case of any clarification, please contact on 022 2272 8083 / 8792.
For & On behalf of BSE Ltd.
Usha Sharma Rajesh Gandhi
Addl. General Manager Deputy General Manager
Surveillance Surveillance
Date: - January 11, 2019