Sebi softens stand on shell companies, says action based on ministry's list

Hints at revoking ban if exchanges give favourable report

Two days after suspending trading in 331 listed shell companies, the capital markets regulator, Securities and Exchange Board of India (Sebi), ordered stock exchanges to verify their credentials and fundamentals. In a letter to the exchanges on Wednesday, the markets regulator hinted if a company’s business model appeared satisfactory, the trading ban could be revoked.

The move comes after Sebi faced widespread criticism from various quarters for classifying these entities as shell companies on Monday. The market value of at least 10 companies on the list is over Rs 200 crore each. Also 161 of these companies were active in