Shares of Assam Company India tank 20% on Wednesday after the Securities Appellate Tribunal has stayed trading restrictions imposed on Assam Company India, which is among the 331 suspected shell companies identified by the government. The stock of one of the oldest tea plantation company tumbled as much as 20% to the day’s low of Rs 5.2 and got locked in the lower circuit on both BSE and NSE. The shares of Assam Company India witnessed heavy sell-off within minutes of the opening bell.
SEBI, on 7 August asked stock exchanges to restrict trading in shares of 331 “suspected shell companies”, some of which have investments by several well-known domestic and foreign investors. The move came after the watchdog received the list of such companies from the corporate affairs ministry and many of the 331 firms are under the scanner of the Serious Fraud Investigation Office (SFIO) and the Income Tax Department.
Assam Company India had moved the SAT against the SEBI directions. Following its appeal, the tribunal has stayed the trading restrictions imposed on the company. “In view of the facts set out in the Memorandum of Appeal and other documents tendered at the time of hearing relating to annual turnover of the appellant company for last three years, which even according to SEBI prima facie appear to be correct.
“We extend the said stay to the case of the appellant company herein and direct the stock exchanges to reverse their decision in respect of the appellant company as expeditiously as possible,” SAT said in an order dated August 21. The tribunal has stayed trading restrictions on 11 companies, including JKumar Infraprojects and Parsvnath Developers, after the entities appealed against the SEBI ban.
Earlier this month, India’s capital markets regulator SEBI shocked investors with its order to suspend trading in 331 suspected shell companies’ shares, putting them on a strict watch under its Graded Surveillance Measure (GSM) framework. The regulator asked the stock exchanges to place all the 331 companies in the stage VI (six) of Graded Surveillance Measure, restricting the trade in these securities to once in a month with additional deposit. The regulator’s directive came after the corporate affairs ministry shared a list of 331 listed companies that are suspected to be shell entities. Out of 331 firms identified by SEBI for action, 162 were actively traded on BSE; 48 were traded on the NSE. The rest have already been suspended by the bourses on account of irregularities.
The regulator’s directive came after the corporate affairs ministry shared a list of 331 listed companies that are suspected to be shell entities. Out of 331 firms identified by SEBI for action, 162 were actively traded on BSE; 48 were traded on the NSE. The rest have already been suspended by the bourses on account of irregularities.