The country's leading stock exchange BSE on Wednesday made an announcement to delist over 200 companies with effect from May 11 as the trading in the stocks of these companies have remained suspended for more than 6 months.
The exchange in two separate circulars, said that 188 companies, in which trading have remained suspended for over six months will be delisted from May 11. The list includes some of the companies that will undergo compulsorily delisting from the exchange's platform.
As part of the compulsorily delisting procedure and regulations, the delisted company, its promoters, whole-time directors and group firm would not be allowed to access the securities markets for 10 continuous years from the date of compulsory delisting. Also, promoters of these companies will have to buy out shares from the public shareholders at a fair price arrived at by the BSE appointed independent valuer. In addition, the companies facing compulsorily delisting will be moved to the dissemination board of the exchange as per the directive of the market watchdog SEBI for 5 years time.
In another circular, the exchange said that 14 companies in which trading remains suspended for over 6 months and are facing liquidation or are liquidated will also be delisted on the same day. The list includes First Leasing Company of India, Brandhouse Retails, Dujodwala Paper Chemicals, Elder Health Care, Elder Pharmaceuticals, Glodyne Technoserve, Helios and Matheson Information Technology, Hiran Orgochem, MCS Ltd, Tulip Telecom, Tutis Technologies, Vajra Bearings, Varun Industries and VTX Industries.
The step by the leading Indian bourse has been taken at a time when government is aggressively clamping down on shell companies, both listed and unlisted. It is to be noted that government de-registered more than 2,00,000 firms that were not carrying business operations for long.