The Securities and Exchange Board of India (Sebi) has asked directors of
about 25 `vanished' companies to consider making buyback offers to
shareholders in order to provide them with an exit route.
These 25 companies are those which have responded to Sebi's show cause
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notices and against whom personal hearings are currently under progress.
According to Sebi sources, the regulator has during the course of the
hearings told these companies to make an offer for buy-back of their
shares, preferably at par, as this would enable investors to exit from
these scrips which are currently trading at near-zero levels.
It was pointed out to these promoters that the floating stock in these
scrips is barely 5-7 per cent and hence the outgo for the companies
would not be too high but the step would ensure that these companies
would not be classified in the category of `vanishing' companies and the
directors would not need to be debarred from the capital markets.
It is learnt, that the promoters and directors sought time from the
regulator to consider the Sebi suggestion. Over the past month, more
than 15 personal hearings have been held by the Sebi chairman, D R
Mehta. Sebi has so far debarred 142 directors of vanished companies from
associating with the capital markets for a period of five years.
In July, Sebi had debarred 70 directors of which 12 directors made
representatio