Mobile Telecommunication Ltd, one of the companies barred by the recent SEBI order for ‘being an allegedly suspected shell company’ has asked the regulator to remove its name from the list and sought a visit from the market watchdog to examine its books.
The Securities and Exchange Board of India (Sebi) had imposed trading restrictions on 331 listed entities identifying them as suspected shell companies carrying out illegal activities like tax evasion and money laundering.
The crackdown is part of a broad crackdown on unlawful offshore transfers and tax evasion. Though the regulator did not list out the illegal activities the companies may have been engaged in for which it has suspended them, the restrictions’ impact could be far reaching in putting retail investors to hardship and losses. The curbs include limiting trading in the affected companies to once a month and also in the trading of shares held by the promoters and directors of the companies.
There have been mixed reactions on SEBI’s move as a certain section feels the action was long overdue to instill investor confidence that the regulator can act for their interests while another view is this will go against these very investors for whose interest SEBI is claiming to be concerned.
Meanwhile the Securities Appellate Tribunal (SAT) has SEBI to follow the ‘natural course of justice’ by giving the companies a chance to represent before taking stringent action.
Many such listed companies have responded to the SEBI circular by sending their annual reports, credit ratings and other financials along with their filings to convince the exchanges and SAT that they are not shell companies and are operating in compliance with all the regulations.
SAT has asked SEBI to hear out these companies by Thursday afternoon and then pass orders.
“We would like to draw the attention of public at large in respect of a list of a 331 suspects shall companies where our name is also featured. We would like to clarify that Mobile Telecommunication Ltd is not a shell company and it’s unfortunate to get included in the list of Grade surveillance Measure (GSM) stage VI. The company was incorporated in the year 1995 and has a state-of- the-art facility for electronics manufacturing at Nashik Maharashtra in a 9000 sq mt area. It has recently completed expansion plan to manufacture AC/DC Wire cords and cables with an installed capacity to manufacture 100,000 cables per day with equally participation of an overseas investor. Our company is an ISO 9001, BIS and ISD 13894 certified company which is eligible to manufacture the PCBs for medical applications Our company has a good track record for 22 years in compliances with statutory authority. It has been recently awarded a B+ rating from Crisil post their visit of plant and interview with the management of our company. The company hasn’t defaulted since its incorporation and so far we are not been any controversy or associated with any malpractices or controversy of any sort.
We would like to request you to kindly depute your officials to visit our factory premises mentioned here under into the affairs of the company before placing us in the list of Shell Company. Kindly remove our name with immediate effect so the investors shouldn’t suffer and we can win back the trust of our overseas investors In case anything needed at our end please feel free we will be happy to corporate with you”, said Mobile Telecommunications on a BSE posting.
Earlier infra company J Kumar and real estate major Parsavnath had objected to their names being on the list saying they have all compliances in place and are duly registered with the RoC.