Sebi ban on shell companies: Why investors should be worried

The ban will be harsh on companies that eventually come clean post Sebi investigation, feel analysts

If you hold shares in any of the suspected shell companies that have been banned from trade following the Sebi order on Monday, you have a genuine reason to worry – at least for now.

On Monday, market regulator Sebi directed the stock exchanges to ban trading in shares of 331 suspected shell companies and placed them under a graded surveillance measure (GSM) stage VI, where trading in the security is allowed only once a month with “surveillance deposit” of three times the trade value.

According to estimates, mutual funds and investors collectively own shares worth nearly Rs