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NSE, BSE initiate audit of 100 'shell' firms

Sources said the exchanges were in the process of appointing an audit panel

Shrimi Choudhary  |  Mumbai 

NSE, BSE initiate audit of 100 'shell' firms

have initiated audits of suspected According to sources, the National Stock Exchange (NSE) and the will first 100 suspended companies of the 331 listed by the government.
 
The move follows the Securities and Exchange Board of India’s (Sebi’s) directives to to verify the credentials and fundamentals of the “331 suspected shell companies", which have been barred from trading. The market regulator, in a letter dated August 9, asked the exchanges to seek the auditor’s certificate from the companies, with a list of other disclosures. These include annual income tax returns for three years and description of pending tax disputes, if any. Companies were also asked to provide status reports on compliance with the Companies Act and Sebi’s listing regulations.

 
Sources said the exchanges were in the process of appointing an panel to examine the selected firms, including their trading data. Sebi, in a meeting last week, learnt to have briefed stock exchange about the action plan against the suspected Sources said promoter's share could be freezed until investigation concludes.
 
The regulator had last week directed the exchanges to suspend the suspected firms. The 331 suspected shell companies were identified by the corporate affairs ministry.
 
However, the Securities Appellate Tribunal temporarily stayed the trading ban on some of them imposed by the regulator.

First Published: Thu, August 17 2017. 01:17 IST
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