Sebi orders continuation of forensic audit of Pincon Spirit

Markets regulator Sebi has said that the forensic audit of Pincon Spirit, which figures in the list of 'suspected shell companies', will continue as directed through an interim order.

In an interim order dated December 19, 2017, the Securities and Exchange Board of India (Sebi) had ordered forensic audit of Pincon Spirit Ltd (PSL) to check misuse of funds even as the regulator had lifted trading curbs imposed on the firm.

As per the interim order, trading in the securities of PSL was reverted to the status prior to August 7, 2017, when the curbs were imposed.

PSL is among the firms against which Sebi had initiated action on August 7, 2017, by ordering trading restrictions after it received the list of 331 'suspected shell companies' from the government.

The trading restrictions -- allowing trade only once a month and that too for only buy transactions with a 200 per cent security deposit -- were revoked in some cases a few days later, following appeals filed by the companies with the Securities Appellate Tribunal, but Sebi was asked to continue with its probe and pass its orders expeditiously.

"... I note that PSL has not submitted any response to the allegations/ prima facie findings/ directions in the interim order.

"Further, no material has been brought to my notice contradicting the allegations/ prima facie findings as described in the interim order or warranting any change in the directions passed in the interim order," Sebi Whole Time Member Madhabi Puri Buch said in an order dated May 16.

Buch said, the facts and circumstances of the case as brought out in the interim order have not changed, justifying the dis-continuation/modification/revocation of the directions passed in it.

"Thus, I... hereby confirm the directions contained in the interim order dated December 19, 2017 and forensic audit of PSL as directed vide interim order shall continue," Buch said.