Giving a lifeline to the 331 shell companies, which were delisted from stock exchanges, SeBI has issued instructions to the stock exchanges to hear their case. In a statement released on Wednesday, SeBI has asked the stock exchanges to check the income tax returns of last 3 years along with other financial documents of the companies and only if the finances are found satisfactory, the companies will be given a chance to start trading again.
According to sources aware of the developments, stock exchanges will conduct an initial check with the financial details of the companies. If the finances are in order, the exchanges will notify SeBI of the same and in case, there are concerns verifying the financial details submitted, SeBI will conduct an audit along with taking other steps mentioned in the circular issued on August 7th.
In an emailed statement, NSE stated that the process of verifying the credentials has already started and there will be an announcement on the matter soon.
SeBI has come into action after the move of delisting the companies came under severe criticism by the affected companies. A number of companies, including J. Kumar Infraprojects Ltd, Parsvnath Developers Ltd and Prakash Industries Ltd moved the Securities and Appellate Tribunal against Sebi on Wednesday. These companies have been talking about their clean transaction history and dividend-paying record on the stock exchange.
After the notification of SeBI on 7th August, the companies will see their stocks trading on the stock exchanges once every month.