Sebi to take stock of shell crackdown

New Delhi, Sept. 17 (PTI) Market regulator Sebi will update its board tomorrow on action being taken against suspected shell companies allegedly abetting the routing of illicit funds through stock markets. Those under the scanner include over 300 listed companies as also hundreds of unlisted entities and individuals, suspected to be misusing the stock exchange platform for tax evasion, among other wrongdoings, a senior official said.

Besides, the board would consider other proposals including expediting settlement proceedings and streamlining its internal mechanism to better decide on whether they need soft or hard enforcement actions.

The market regulator will soon put in place internal guidelines for select cases of internal guidelines, which would also be made applicable for pending cases.

The proposal assumes significance against the backdrop of various high profile cases, including those related to the NSE and PwC, where settlements are being sought.

The board is likely to have a detailed discussion on the developments related to suspected shell companies listed on the bourses and actions taken against them, sources said.

While a large number of listed companies are under the scanner for allegedly being conduits for illicit money, the regulator is also keeping a close watch on cases where entities are availing LTCG (Long Term Capital Gains) benefits through sham transactions in stocks.

A slew of issues, including protecting the interest of investors who have put their money in suspected shell companies and regulatory measures that can be initiated against officials of such firms, would be deliberated upon.

Securities and Exchange Board of India ( SEBI )