Sebi relaxes restrictions on over 250 entities

Sebi had in June last year barred four companies and 250 related entities from the securities market for making Rs 614 crore illegal gains through suspected money-laundering and tax evasion activities.

Bombay Stock Exchange. File Photo: IANS

Sebi has eased curbs on over 250 entities against whom the regulator had taken action in three different cases of alleged misuse of stock market platform for tax evasion and suspected money laundering activities.

The entities, which were barred from the securities market in three different cases, have now been allowed certain relaxations, including permission, to deal in government securities and invest in ETFs (exchange-traded funds).

Besides, they can enter delivery-based transactions in cash segment in NSE Nifty 500 index as well as S&P BSE 500 shares and subscribe to mutual funds.

Among others, these entities can tender shares lying in their demat accounts in any open offer/delisting offer under the relevant Sebi regulations.

Sebi had in June last year barred four companies and 250 related entities from the securities market for making Rs 614 crore illegal gains through suspected money-laundering and tax evasion activities.

The companies were Eco Friendly Food Processing Park, Esteem Bio Organic Food Processing, Channel Nine Entertainment and HPC Biosciences.

Now, the watchdog has eased restrictions on 107 of them.

In the matter related to First Financial Services, Sebi had barred the company and 151 other entities in December 2015. The action was initiated for alleged tax evasion.

Out of the 151 entities, 133 have been given relaxations.

With regard to the case involving Kamalakshi Finance Corp (now known as Gromo Trade & Consultancy Ltd), the watchdog has eased curbs on 19 entities.

Through an interim order passed in December 2014, Sebi had barred Kamalakshi Finance Corporation and 32 other entities from the securities market till further directions.

"I deem it appropriate to make further relaxations so as to address the issues of the personal and business exigencies or other liquidity problems," Sebi Whole-time Member Rajeev Kumar Agarwal said in three separate but similarly-worded orders passed today.

As per the latest orders, the entities for whom relaxations have been extended can sell the securities lying in their demat accounts as on the date of interim orders. This will exclude shares of the companies which are suspended from trading by the stock exchanges concerned.

Besides, sale proceeds lying in the escrow account can be used for certain purposes.

Sebi said that up to 25% of the value of the portfolio as on the date of the interim order or the amount in excess of the profit made/loss incurred or value of shares purchased to give exit, whichever is higher, may be utilised for business purposes and/or for meeting any other exigencies or addressing liquidity problems etc.

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