Exit guidelines baffle promoters of compulsorily delisted firms

A spate of compulsory delistings have led to a peculiar problem. Promoters of such companies are required to offer shareholders an exit by buying delisted shares. 

However, there is no mechanism by which the promoters of compulsorily delisted firms can offer such exits, a matter which has been raised with the regulator, according to two sources familiar with the matter.

They face penal action, including freezing of their dividends and a bar on sale or pledging of shares in the absence of an exit.

A body of tax consultants and other professionals has written to stock market regulator, the Securities and Exchange Board