'Vanishing act' by more than two dozen listed cos; BSE reaches out to firms

Companies had been non-compliant with listing requirements

BSE
The BSE has now given them the opportunity for a personal hearing in the first week of February
Sachin P Mampatta Mumbai
3 min read Last Updated : Jan 11 2023 | 10:50 PM IST
Asia’s oldest stock exchange has reached out to multiple companies that have been suspended for not meeting listing requirements, only for their communication to be returned undelivered from their registered office addresses.

The BSE has now given them the opportunity for a personal hearing in the first week of February, after which they will be compulsorily delisted from stock exchanges.

They are already found to be in violation of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and similar norms to remain listed on stock exchanges.

 “The exchange has initiated the process of compulsory delisting of companies that have been suspended for more than six months for non-compliance with critical regulations of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015/clauses of the erstwhile listing agreement or suspended for other reasons and have not completed the formalities for revocation of suspension within stipulated timelines,” said an exchange notice to companies.

Illustration: ajay mohanty

The companies on the list are from sectors including trading, finance, packaging, textile, realty, and others. Trading and finance companies account for half-a-dozen companies each.

A Business Standard analysis of the last available shareholding data for these companies shows an average of over 2,000 individual shareholders stuck in each scrip. Some have over 10,000 shareholders.

The top companies in terms of individual shareholders include Sunstar Realty Development (11,788 individual shareholders), Sai Baba Investment and Commercial Enterprises (11,389), DMC Education (7,732), Acil Cotton Industries (6,346), IBM Watson (4,663), and others.

The earliest available price for 20 of the 26 companies is from the 1990s. This was a period of a large number of companies hitting the market. For example, there were 1,336 companies listed in 1994-95. There were 1,402 in 1995-96. Many raised money from investors and then subsequently could not be located. These were called ‘vanishing companies’.

Business Standard reported in 2021 that about 50 companies were not found at their registered address.


An exchange official had stated that the Ministry of Corporate Affairs decides on classifying them as vanishing companies based on their criteria. A ministry official had said at the time that the Companies Act, 2013, has no provision for vanishing companies, although authorities can act to strike off such companies and block their bank accounts.

The exchange has also reached out to 10 companies where notice was received at their official corporate address, but they did not respond. Companies include Alchemist Realty, Aplaya Creations, and B Nanji Enterprises.

“…this notice is being issued by the exchange to inform that a last and final opportunity is being granted to companies to inform whether they want to avail of a personal hearing before the delisting committee of the exchange at its meeting scheduled on February 6, 2023. Please note that if no confirmation is received from the company strictly within the stipulated timelines…the exchange would proceed with the process …,” said the exchange notice to companies.

An email sent to BSE did not immediately receive a reply.  

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Topics :SEBIBSElisted firms

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