Trading in a dozen suspected ‘shell’ firms to resume within a week: Finance Ministry

NEW DELHI: Finance Ministry on Wednesday said that trading in about a dozen of suspected ‘shell’ companies is likely to resume in a week's time, ET Now reported.

The ministry said that it has taken actions against some companies that saw a spike in trade during the note ban. MCA has identified some of the 311 suspected shell companies to be violating Income Tax rules, it said.

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Shell companies are dubious entities that are generally used for laundering illegal funds. However, the term ‘shell company’ is not defined under the Companies Act.

Current SEBI norms stringent enough, the ministry said, adding that the suspected companies will be asked to submit documents to prove their stand.

The companies identified will soon be issued Sebi notification and would be given time to explain their position, ET Now reported the ministry as saying.

The market regulator Sebi had on Monday directed stock exchanges to take action against 331 suspected listed ‘shell’ companies.

As part of efforts to curb black money menace, Sebi had said that the scrips would not be available for trading this month.

According to BSE, trading in all such listed securities shall be placed in Stage VI of the graded surveillance measure (GSM) with immediate effect. If any listed company out of the said list is already identified under any stage of GSM, it shall also be moved to GSM Stage VI directly.

Here is a list of the banned companies: