SAT gives more time to 2 cos for complying with BSE direction

The Securities Appellate Tribunal has asked BSE not to suspend trading in the shares of two companies -- Risa International and High Ground Enterprise -- for now and directed them to furnish the requisite auditor certificates to the bourse in two weeks.

However, each company has been directed to make a payment of Rs 10,000 each to the exchange within one week.

The two are among the 31 companies whose trading was to be suspended from today onwards by BSE with respect to alleged manipulation in the price of securities through preferential allotment route.

On March 28, BSE said it would suspend trading in shares of as many as 31 companies.

Appealing against the decision, Risa International and High Ground Enterprise, approached the tribunal.

In its order issued yesterday, SAT said that since action has not been taken on the ground that the companies have committed serious violations of the rules, but because they have failed to furnish requisite auditor certificates along with necessary documents.

Since the two entities are ready and willing to furnish those documents, "without going into the merits of the case we grant extension of two weeks" for the appellants to submit the requisite auditor's certificate, the tribunal said.

This would be subject to payment of costs of Rs 10,000 to be paid by each company to BSE within one week from yesterday.

"... BSE is directed not to suspend the trading in the securities of the appellants," SAT said.

Further, the tribunal said that if the appellants submit the requisite auditor's certificate within the stipulated two weeks, the exchange should consider the same and thereafter "may pass appropriate orders thereon as it deems fit".

"If the appellants fail to submit the auditor's certificate within two weeks from today then the BSE shall be at liberty to suspend the trading in the shares of the appellant companies forthwith," it noted.

BSE's move came less than a month after it had cautioned about substantial increase in manipulation/abrupt movement in the prices of securities wherein common modus operandi was found to be through preferential allotment route.