Markets regulator Sebi has ordered a forensic audit of ARSS Infrastructure Projects, which was among the 331 suspected shell companies, even as it lifted the trading restrictions imposed on the firm.
The watchdog has directed the stock exchange to appoint an independent forensic auditor to verify various factors, including whether there has been misrepresentation of financials and misuse of funds of the company.
After receiving the list of 331 suspected shell companies from the corporate affairs ministry, Sebi imposed trading curbs on these firms, including ARSS Infrastructure Project Ltd (AIPL), on August 7.
Earlier this month, the watchdog had removed curbs imposed on some entities that featured in the list of 331 suspected shell companies.
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.