Investor body petitions SAT on bourse's mass delisting last year

Last year, BSE published a list of 194 cos delisted for remaining suspended 7 yrs or more

Midas Touch Investors Association has petitioned the Securities Appellate Tribunal (SAT), challenging the BSE exchange's delisting last year of several companies.

It has alleged the delisting did not follow procedures laid down by the Securities and Exchange Board of India (Sebi). It wants SAT to set aside the decision to delist 194 companies and restrain BSE from further delisting without following the procedure prescribed in the Sebi (Delisting of Equity Shares) Regulations. The plea will come up for admission before the SAT on Friday.

In August, the BSE published a list of 194 companies in newspapers, delisted for remaining suspended seven years or more. It also gave the fair value to be paid to the public shareholders for each of these.

However, for most of these companies, it did not know who the promoters are, making market participants wonder how these orders would be enforced. According to the detailed public notices, the column under the head of 'name and addresses of the promoters' read 'not available' for 168 of the 194 cases, Business Standard had reported then.

Under Regulation 22 (6) of the said regulations, it is mandatory to disclose 'The names and addresses of the promoters of the company who would be liable under sub-regulation (3) of regulation 23." The latter regulation stipulates that "the promoter of the company shall acquire delisted equity shares from the public shareholders by paying them the value determined by the valuer".

In the appeal before SAT, Midas called the BSE decision "anti-investors" and "illegal". The standard operating procedure issued by Sebi in 2013 in pursuance of the Sahoo committee recommendations (in 2010 and 2011) on non-compliance of listing agreement terms by a listed company was also not followed, Midas has argued in the petition.

It also alleged BSE concealed the delisting orders on the 194 companies from the public and investors, not having displayed it on its website.