N Sundaresha Subramanian | New Delhi February 20, 2013 Last Updated at 22:50 IST
Suspended firms: HC notices to Sebi, bourses
The notices followed a hearing of two PILs seeking a CBI probe into regulatory inaction on suspended companies
The Delhi High Court has issued notices to the Securities and Exchange Board of India (Sebi), the National Stock Exchange (NSE) and the BSE in a case
relating to suspended companies. Sebi and two exchanges have been directed to file responses to the notices.
The court issued a similar notice to the Union government, too.
Responses to the notices have to be received before the next hearing, scheduled for May. “They have to file their responses well in advance and we shall file
our rejoinders, if any,” said one of the petitioners.
The notices followed a combined hearing of two public interest litigations (PILs) seeking a probe by the Central Bureau of Investigation into regulatory
inaction on suspended companies. The PILs were filed by Delhi-based Midas Touch Investors Association and Delhi-based pilot Atul Agarwal last year. As
both PILs dealt with the issue of investor money locked up in companies suspended by stock exchanges, the court decided to combine these.
While running an investor helpline, Midas Touch had received about 2,000 complaints against 450 companies “suspended” by stock exchanges for
“non-compliance with the listing agreement”. Midas said when these grievances were taken up with stock exchanges, they had expressed their inability to
help redress grievances against suspended companies and advised the company to take up the matter with Sebi.
At a meeting on December 7, 2010, Midas founder Virendra Jain had raised the issue with Sebi and the Investors’ Association and requested assistance. He
had said though suspension from the bourses didn’t affect the companies’ operations, it had an adverse impact on its public shareholders, as they couldn’t sell
shares on the exchange until the suspension was revoked by the exchange or Sebi. According to Agarwal’s petition, there were “10 million public
shareholders/investors of these 1,405 suspended companies, whose enormous investment of more than Rs 1,79,560 crore in these suspended companies is at
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