BSE files insolvency cases against 7 firms
MUMBAI: In a first, a stock exchange is taking firms that have failed to pay up dues to the bankruptcy court.
BSE Ltd on Tuesday said it is taking seven companies to National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) for non-payment of annual listing fees.
The exchange has identified 130 such companies and in the first round, it has already filed insolvency proceedings against seven. These include three firms already suspended from trading (S Kumars Nationwide, Asahi Infrastructures and Projects and Tricom India) and four that are still trading (Neo Corp International, Mavi Industries, Twinstar Industries, Sezal Glass). BSE will take a similar action against the other firms too.
“A few listed companies have failed to pay annual listing fees (ALF) to BSE in spite of advance intimation, reminders and grant of sufficient time in the past few years. Such companies continue to be listed and traded on BSE. There are about 130 such companies,” said the BSE in the press statement.
In the interest of investors who may be trading in such companies, it has become incumbent to initiate action against such listed companies defaulting in payment of listing fees, under the IBC, the statement added.
“The idea behind filing the insolvency proceedings against these companies is to make investors aware about them. These companies are not able to pay their listing fees, so should an investor remain invested them or not?” said Ashish Chauhan, managing director and CEO of BSE.
A query sent to NSE on whether it was also contemplating taking companies to NCLT on non-payment of listing fees, was not answered.
So far, the IBC route has been taken by financial creditors such as banks, mutual funds and operational creditors such as vendors and service providers to recover their dues.
An exchange with its listing fees dues would be considered as operational creditor.
Banks have so far referred 12 large borrowers for insolvency proceedings following a June 13 directive from the Reserve Bank of India.