Sebi Asks Bro­kers to Ver­ify Data of 107 Un­listed Firms

The Economic Times - - Markets: Beating Volatility - Our Bu­reau

Mumbai: The Se­cu­ri­ties and Ex­change Board of In­dia (Sebi) on Fri­day asked bro­kers to ver­ify the cre­den­tials and fun­da­men­tals of 107 un­listed com­pa­nies that are sus­pected to be shell com­pa­nies.

Bro­kers, who have reg­is­tered any of the 107 com­pa­nies as clients, have been asked to seek au­di­tor’s cer­tifi­cate from th­ese com­pa­nies with in­for­ma­tion on sta­tus of fil­ing of in­come tax re­turns for the last three years and pend­ing dis­putes with the I-T de­part­ment.

If the ver­i­fi­ca­tion of cre­den­tials is not found sat­is­fac­tory, their Unique Client Codes should be tem­po­rar­ily dis­abled by the ex­changes and a re­port on the same should be sub­mit­ted to Sebi, the BSE said in a cir­cu­lar. A Unique Client Code serves as an ex­clu­sive iden­ti­fi­ca­tion of any­body trad­ing in the mar­ket and bro­kers have been man­dated to use UCC which is linked to the PAN de­tails of a client. The UCC helps bro­kers main­tain data­base of their clients.

The list of 107 in­cludes Non­stop Plan­ta­tion, Sapoi Tea, Balashri Com­mer­cial, Tripu­rari Fin­vest, Swastik Se­cu­ri­ties , Snow White Metal, Satyam Projects, Exim Fi­nance, Denim De­vel­op­ers and Kal­pataru Engg, among oth­ers.

Ear­lier this week, the mar­kets reg­u­la­tor had re­leased a list of 331 sus­pected shell com­pa­nies iden­ti­fied by the Min­istry of Cor­po­rate Af­fairs and di­rected ex­changes to re­strict trad­ing in them. Since then, the Se­cu­ri­ties Ap­pel­late Tri­bunal (SAT) has lifted re­stric­tions on some of the com­pa­nies. The BSE has asked bro­kers to do the due dili­gence based on the au­di­tor’s cer­tifi­cate and sub­mit a re­port to the ex­change by Au­gust 31. The au­di­tor's cer­tifi­cate should give in­for­ma­tion on sta­tus of th­ese com­pa­nies with re­quire­ments of the Com­pa­nies Act and an­nual re­turns fil­ing dur­ing the last three years.

The au­di­tor’s cer­tifi­cate will also need to men­tion whether the com­pany is a go­ing con­cern and pro­vide de­scrip­tion of its busi­ness model. The cer­tifi­cate will also need to pro­vide bank state­ments of last one year with ac­tive or dor­mant sta­tus and the sta­tus of the com­pany with re­spect of de­fault to any bank or fi­nan­cial in­sti­tu­tion.

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