Hyderabad Bourse To Delist Errant Firms From Sept

The Hyderabad Stock Exchange (HSE) is all set to suspend almost a fourth of its listed companies from September 1.

The governing board of the bourse, which met yesterday afternoon, decided to suspend the companies following unsatisfactory response to its earlier notices to the 246 listed companies for non-submission of financial results for the year ending March 31, 1997.

The defaulting companies include a number of regional majors like Sanghi Polysters, Natco Pharma Ltd, SOL Pharmaceuticals Ltd, Continental Coffee, Navbharat Enterprises, Rank Aqua Estates, VIF Airways and three companies of the Prudential Group.

The list includes around a dozen marine-based companies including three in the tuna deep sea fishing line-- Bayliners, Fishing Falcons and Samura Maritime Ltd.

Also in the list are half a dozen granite companies which are at present facing a financial crunch. A number of chemical and pharmaceutical companies also figure in the list.

According to P C Shrimal, HSE president, the 299 companies were told to submit their financial results by July 5. But majority of them failed to reply.

Natco Pharma and SOL Pharmaceuticals Ltd are understood to have informed the exchange that since they had extended the period of their financial year up to September 1997, they need not submit results for the period ending March 31 this year. Natco also pointed out that the Bombay Stock Exchange (BSE) had agreed to their argument that since the financial year has been extended, they were not obliged to submit results by the HSE deadline.

According to HSE executive director, M Subramaniam, BSE had told their Hyderabad counterpart that the bourse could proceed as per their rules and they had not given any such assurance to Natco .

As per HSE's listing agreement, all listed companies whose financial year closes by March 31 should submit unaudited results by the end of May and audited reports by June end.

One of the HSE directors told Business Standard yesterday that the bourse will be advisingother exchanges not to allow trading in respect ofthe suspended firms.

He said though this was a formality on earlier occasions some of the major exchanges failed to heed penal action taken by the regional exchanges on defaulting companies. "We hope this will not happen now in the interest of the investors. The Securities and Exchange Board of India should also take note of such violations", he added.