SEBI bans Parsvnath Developers from trading

SEBI bans Parsvnath Developers from trading
09/08/2017 , by , in News/Views

After the Corporate Affairs ministry identified Parsvnath Developers as a shell company, the market regulator Securities and Exchange Board of India (SEBI) has put the real estate company in the restricted trade category thus imposing a ban on it from trading.

The company will now be placed in Stage VI of the Graded Surveillance Measure (GSM) and allowed to trade only once a month, i.e, first Monday of the month, under the trade-to-trade category, according to a Sebi notification. Also, promoters of Parsvnath are not allowed to sell their shares till the restriction is lifted.

The corporate affairs ministry shared a list of 331 listed companies that are suspected to be shell entities. Shell companies are dubious entities that are generally used for laundering illegal funds.

Sebi on Monday asked the Bombay Stock Exchange (BSE), the National Stock Exchange (NSE) and the Metropolitan Stock Exchange to keep the 331 shares in stage four of the graded surveillance measures (GSM) with immediate effect.

Exchanges will now initiate a process of verifying the credentials of such companies and appoint an independent auditor to conduct audit of such listed companies. They can even conduct forensic audit of these companies to verify its credentials if necessary.

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