Sebi jumps the gun

Principle of natural justice cannot be ignored

The Securities and Exchange Board of India (Sebi) decided on Monday to suspend trading in 331 listed companies that it suspected were “shell companies” and received suspicious cash deposits in the wake of the demonetisation announcement last November. These deposits are being investigated. Predictably, the action knocked down investor sentiment as trading in the companies under scrutiny will be allowed only once a month under stringent conditions. A deposit of 200 per cent of the trade value must be submitted and this deposit will be held by the exchange concerned for the next five months. At one level, it is