To safeguard investors of firms listed on non-operational bourses, the Securities and Exchange Board of India (Sebi) on Friday decided to initiate action against companies which have failed to submit an action plan to list on bourses or to provide exit option to shareholders.
Exclusively listed companies (ELCs) on the dissemination board were required to submit action plans to either list on pan-India bourses or provide exit option to shareholders by September 30.
The regulator had, in October 2016, provided three months time to ELCs to submit an action plan to list on bourses or to provide exit option to shareholder. In January this year, it had asked such companies to submit the action plan till March.
ELCs are entities listed on non-operational exchanges and are currently on dissemination board of functional bourses where they are not traded.
As of June 30, as many as 2,000 ELCs were on the dissemination board. Of these, 376 submitted the plan of action. Besides, a total of 189 ELCs obtained listing on the main board exchanges and another 64 exited.
The regulator said that there are 536 ELCs which are traceable and but did not submit plan of action.
“Out of 536 ELCs, there are few ELCs which have made representation to Sebi/stock exchanges and their representations are under examination. Sebi has extended the time to submit plan of action by such ELCs till September 30, 2017,” Sebi said. It would now initiate action against the non-compliant companies and its directors/promoters.