JKumar, Parsvnath move SAT against shell company tag

Number of companies, including JKumar Infraprojects and Parsvnath Developers, Wednesday approached the Securities Appellate Tribunal against Sebi classifying them as "shell companies". Sebi defended the move even as several other firms are expected to take similar recourse and challenge the regulator's decision asking stock exchanges to restrict trading in 331 firms referred to it by the government for being "suspected shell companies". \These companies are seeking stay on trading restrictions.

Sebi has asked the exchanges to restrict trading in shares of 331 such companies, some of which have investments by several well-known domestic and foreign investors.

On Tuesday, many of the companies tagged annual reports and other financials along with their filings to press upon the exchanges that they are not shell companies and are in compliance with all regulations. "We are shocked to find our company's name amongst the list of suspected shell companies as a result of which, our equity shares...are being shifted to GSM VI on the stock exchanges. J Kumar Infraprojects Tuesday said it is not a shell company and suspicion of the regulator is uncalled for.

"Our company's compliance track record both with the exchanges and Registrar of Companies have been impeccable". "As a result, our company's securities may be traded only once in a month on a trade to trade basis and Sebi has envisaged a "financial audit" thereby implicitly castigating us and tarnishing our reputation," Parsvnath Developers had said on Tuesday.

Parsvnath Developers had also said it is not a shell company by any "stretch of imagination".