Sebi has ordered forensic audit of four more companies, which were among the 331 suspected shell companies, even as it lifted trading curbs imposed on them.
ARSS Infrastructure Projects Ltd (AIPL), Jai Mata Glass Ltd (JMGL), Dalmia Industrial Development Ltd (DIDL) and MPF Systems Ltd (MPFSL) are the four firms. These were in the list of 331 suspected shell companies that came from the corporate affairs ministry, following which Sebi imposed trading curbs on August 7.
The watchdog has directed stock exchange to appoint an independent forensic auditor to verify various factors, including whether there has been misrepresentation of financials and misuse of funds in the case of AIPL, DIDL and MPFSL.
In the case of JMGL, audit would be for "verification, including the credentials/ financials of JMGL and to trace the end-use of proceeds of sale of land by JMGL".
Earlier this month, the watchdog had removed curbs imposed on some entities that featured in the list of 331 suspected shell companies, ordering forensic audit in the case of certain firms.
In a 15-page interim order, the regulator has said trading in securities of AIPL would be reverted to the status as it stood prior to August 7.
"The promoters and directors in AIPL are permitted only to buy the securities of AIPL. The shares held by the promoters and directors in AIPL shall not be allowed to be transferred for sale, by depositories," the order issued on Monday said.
While ordering a forensic audit, the regulator said various aspects need to be verified including whether AIPL has actually executed the contracts claimed to have been undertaken by it from "PACL, PGFL, Rajesh Projects (India) Pvt Ltd, Aerens Goldsouk International Ltd and Mahaveer Infra Engineering (P) Ltd".
In case these contracts were not executed, the extent of value of artificially inflated revenue of AIPL and the illegal gain if any, earned by it should be verified, it added.
"In view of the prima facie evidence on misrepresentation by the company and strong suspicion of misuse of funds/ books of account... the persons who are in control of the company and the directors of the company are prima facie liable for action by Sebi and should not be permitted to exit the company at the cost of innocent shareholders," the order noted.
Except for AIPL, the other three orders were issued today.
In a separate order, Sebi has ordered appointing an independent auditor to carry out forensic audit of JMGL. At the same time, the regulator has lifted the trading curbs on the company.
The audit would be for "verification, including the credentials/ financials of JMGL and to trace the end-use of proceeds of sale of land by JMGL".
Besides, the limitation on the transfer of shares held by the promoters and directors of JMGL has been removed since there is no prima facie evidence of misrepresentation or misuse of books of accounts or funds by the company.
With regard to DIDL and MPFSL, the regulator said the audit would look into whether there has been misrepresentation of financials and misuse of the books of accounts, among others.
"The promoters and directors in DIDL are permitted only to buy the securities of DIDL. The shares held by the promoters and directors in DIDL shall not be allowed to be transferred for sale, by depositories," Sebi said in an order.
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