Sebi slaps Rs 1cr fine each on 12 cos

The market regulator is coming out of the slumber. The Securities and Exchange Board of India (Sebi) has initiated steps to impose a penalty of up to Rs 10000000 each on 12 erring companies, including Enkay Texofood Limited Lloyds Finance Limited Padmini Technologies Limited and Vikas WSP Limited for failing to resolve investors’ grievances. The market regulator has appointed adjudicating officer to pursue action under the Sebi Act after these companies failed to redress complaints despite directive to do so, Sebi stated in a release. The other companies against whom Sebi was taking action include Gujarat Fun ‘N’ Water Park ltd, J.F. Laboratories Limited Mafatlal Finance Company Limited Monica Electronics Limited Panchamahal Cement Limited Pentafour Products Limited Prudential Capital Markets Limited Western India Shipyard Limited the release further stated. These 12 companies topped the list of investor complaints. ‘‘They refused to resolve the complaints of investors after mobilising funds from the public,’’ said an investor. The Indian Express recently ran a series—Loot and Scoot — on companies which vanished after raising money from the public. Earlier, Sebi had appointed an adjudicating officer to pursue action against six companies which had failed to address investors’ grievances. The regulator has also directed Shreyans Industries Limited to redress pending grievances before proceeding with further action against the company, it said. Sebi is empowered to impose a penalty of Rs 100000 per day or Rs 10000000, whichever is less, on companies that fail to redress investor grievances after having called up to do so, it added. Some of these companies were suspended by the exchange—after a warning and a show-cause notice—for many reasons like failure to publish financial results, non-payment of listing fees, etc. In short, shareholders of these companies won’t be able to buy and sell their shares. The number of companies which vanished from the scene after raising money from investors through IPOs, fixed deposits, bonds and preferential allotments is increasing – quietly and steadily. Nearly 2,800 companies out of 5,651 companies listed on the BSE have been suspended and not available for trading as of now. Moreover, 606 companies have been classified as ‘unknown’ by the BSE. Though these companies are yet to achieve the classification of ‘vanishing companies’, some of the companies are as good as extinct while others may be operating, but violating all the listing and investor norms.