Parsvnath Developers, Pincon Spirit, four others tank up to 20% after SAT upholds Sebi shell firm order

The stocks of Parsvnath Developers, Pincon Spirit, Signet Industries and three others fell up to 20 per cent after trading resumed at their counters on Monday.

 The Securities and Appellate Tribunal (SAT) stayed curbs imposed on these companies after they appealed against a Sebi order restring trading their secutities.

The scrip of Parsvnath Developers tumbled 9.81 per cent to Rs 21.15 -- its lower circuit limit -- on BSE.

Shares of Pincon Spirit slumped 19.96 per cent to hit its lowest trading permissible limit for the day at Rs 57.35. Signet Industries plummeted 19.96 per cent to Rs 8.94 --its lower circuit limit, SQS India BFSI plunged 15.86 per cent to Rs 422, its 52-week low.

Besides, shares of two companies -- Kavit Industries and Kkalpana Industries (India) Ltd -- listed only on BSE also tanked 4.9 per cent to hit its lowest trading permissible limit for the day at Rs 36.80 and 19.92 per cent to Rs 30.35 (lower circuit), respectively.

Leading bourses NSE and BSE on Friday said trading will resume in shares of Parsvnath Developers and three others from Monday after the SAT stayed curbs imposed on these companies. Besides, shares of Kavit Industries and Kkalpana Industries will also start trading, BSE had said.

The shares of these companies will be moved out of GSM (graded surveillance measures) framework and will be available for trading with effect from August 14, the exchanges had said in similarly-worded circulars.

The move came after the Securities Appellate Tribunal (SAT) on Friday stayed trading restrictions imposed on these companies, which figured in a list of 331 "suspected shell companies" referred by the government to Sebi.

In a surprise order which could have a long-term effect on Indian markets, market regulator Securities and Exchange Board of India (Sebi) on August 7 asked bourses to act against 331 suspected shell companies that the ministry of corporate affairs has listed.

The ministry had already cancelled the registration of more than 1.62 lakh companies that have not been carrying out business activities for long.

The regulator ordered bourses to effectively freeze trading in 162 companies. Earlier, trading in the remaining 169 firms had already been suspended.

Shell companies are used as passage for tax evasion or tax avoidance without having any significant assets and operations. They are not defined under the Companies Act or Sebi Act.