Sebi to encourage delisting of suspended companies

Last year BSE sought delisting of more than 1,000 firms whose shares remained suspended for over seven years

In a major clean-up exercise, markets regulator Sebi today said it will encourage delisting of suspended companies.

At its board meeting today, the Sebi board discussed the plan for action for 2016-17, including steps to encourage delisting of suspended companies.

Top exchange, BSE, last year proposed delisting of more than 1,000 companies from its platform as trading in their shares has remained suspended for more than seven years for various penal reasons.

A proposal in this regard was put forth by Asia's oldest bourse to Sebi, wherein BSE had stated that the shares of these companies can be suspended after giving their shareholders sufficient opportunity to exit.

As per Sebi regulations, a stock exchange can initiate the process for compulsory delisting of a company if it has remained suspended for over six months and it has not taken any step to get the suspension revoked.

Before any such delisting, the exchange is required to give a final opportunity to the company while shareholders need to be informed through public notices about any such step so that they get an exit opportunity.

"We do not want BSE to be used for any tax evasion or for any manipulating issues. So we are slowly taking steps. We are actually going to delist 1,000 companies going forward," BSE Managing Director and CEO, Ashishkumar Chauhan had said earlier.