SAT raps SEBI for shell company diktat sans probe

Stays the market regulator’s order against two companies The Securities Appellate Tribunal (SAT) stayed the order passed against two companies —J Kumar Infraprojects and Prakash Industries —that challenged the SEBI decision at the tribunal, ruling that the Securities and Exchange Board of India (SEBI) did not conduct any investigation before imposing trading restrictions on 331 shell companies, In its Thursday’s order, SAT directed the stock exchanges to lift the trading restrictions on the two firms — a decision that could lead to other companies moving the tribunal to seek immediate relief. Incidentally, SAT stayed the order even as a whole-time member of SEBI heard the arguments of the listed entities and directed them to furnish additional information before the regulator could decide on any form of relief. “Since the delay in disposal of the representation is causing serious prejudice to the appellants we proceed to consider the plea of the appellants for grant of interim relief,” said the order. “.. it is apparent that SEBI passed the impugned order without any investigation... we are prima facie of the opinion, that the impugned communication issued by SEBI on the basis that the appellants are ‘suspected shell companies’ deserves to be stayed,” it added.