Companies Undergoing Insolvency To Face Enhanced Surveillance, BSE Says

Markets regulator SEBI and stock exchanges will put in place additional surveillance measures for companies that are undergoing insolvency resolution process from Monday, according to the leading bourse BSE.

The data available with the Bombay Stock Exchange shows that 75 firms, including ABG Shipyard, Amtek Auto, Bhushan Steel, Jaypee Infratech, Electrosteel Steels, Mandhana Industries, Monnet Ispat & Energy, Ruchi Soya Industries, Supreme Tex Mart, Vardhman Industries and Rei Agro, are undergoing insolvency process as per the Insolvency and Bankruptcy Code.

In order to enhance market integrity and safeguard investors' interest, the Securities and Exchange Board of India and the exchanges have been introducing various enhanced pre-emptive surveillance measures such as reduction in price band, periodic call auction and transfer of securities to trade to trade category from time to time.

“In continuation to various surveillance measures already implemented, SEBI and exchanges, pursuant to discussions in joint surveillance meetings, have decided that along with the aforesaid measures there shall be surveillance measures for companies that are undergoing IRP as per IBC w.e.f June 11,” the BSE said in a release today.

These companies undergoing insolvency process as per the IBC would be monitored on a predetermined objective criteria and the margin on securities would be levied at the rate of 100 percent once the criteria gets satisfied, the statement added. “These securities shall be further monitored for an objective criteria and shall be shifted to trade for trade segment once the criteria gets satisfied,” BSE said.

As per the BSE, the ‘surveillance measures shall be in conjunction with all other prevailing surveillance measures' being imposed by the exchanges from time to time.