Modern, Orkay face delisting

MUMBAI, December 15: Even as the Chandratre committee set up by the SEBI has come out with a host of sweeping proposals on delisting of sha...

MUMBAI, December 15: Even as the Chandratre committee set up by the SEBI has come out with a host of sweeping proposals on delisting of shares, the Bombay Stock Exchange (BSE) authorities have threatened to delist about 770 listed companies securities following their failure to pay listing fees for 1997-98.

The list included companies belonging to groups like Modern, Mahadev, Western India group of Nandan Gadgil, the Kedia group, the Tatia group and others like Orkay Industries, Videocon VCR, J K Synthetics, S M Dyechem, Skyline NEPC and several finance companies. Most of these companies had raised huge money from the public by way of high premium rights and public issues.

The list included five companies in the Modern group (Modern Denim, Modern Insulators, Modern Malleables, Modern Syntex, Modern Terry Towels and Modern Thread), four companies in the Western India group (Western India Industries, Western India Shipyard, Western Paques and Western Components), the Kedia group (Kedia Continental, Kedia Distilleries and Kedia Vanaspati), the Tatia group (Tatia Financial Services, Tatia Intimate Exports and Tatia Skyline).

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According to BSE, under clause 38 of the listing agreement, companies whose securities are listed on the exchange are required to pay the annual fee for each financial year on or before April 30. As per the records of the exchange, it has not received listing fees for the financial year 1997-98 from these companies despite two reminders and a show-cause notice sent to them.

The BSE has once again warned these companies to pay the listing fees and arrears due on or before December 31, 1997. It may be recalled that the BSE had delisted about 173 companies last year following non-payment of listing fees. The list has expanded this year.

The SEBI committee, which submitted the report last week, had recommended the “exchange should not resort to delisting of securities on the ground of non-payment of listing fee unless all other remedies fail.” It has said a precise procedure should be laid down for delisting by the exchanges. It has recommended scrapping of the listing agreement and inclusion of listing procedures in the SCR Act.

According to BSE sources, apart from listing fees, the exchange has also identified several companies whose shares are held by the promoters for delisting. The exchange has a plan to delist these companies also because this kind of listing will benefit only promoters to take advantage of tax by listing in the exchange. Currently, the BSE has over 6,700 listed companies of which about 6,000 scrips are listed in the B2 group.