Sebi has ordered forensic audit of Pincon Spirit Ltd, which figures in the list of suspected shell companies, to check misuse of funds even as the regulator lifted trading curbs imposed on it.
Trading in the securities of Pincon Spirit will be reverted to the status prior to August 7, when the curbs were imposed, the Securities and Exchange Board of India (Sebi) said in an interim order dated December 19.
"There is prima facie evidence of misrepresentation of business/financials as well as suspicion of misuse of funds/ books of accounts of the company. The directors and KMPs (key management persons) have, therefore, prima facie failed to discharge their fiduciary responsibility.
"The company is also liable for prima facie violations observed and it is imperative that in the interest of investors, the financials of the company be independently audited to establish their genuineness," Sebi Whole-Time Member Madhabi Puri Buch said.
Accordingly, Sebi has directed the exchange to appoint an independent forensic auditor to verify any misrepresentation of financials and business of Pincoin Spirit as well as any misuse of the funds or books of accounts.
Shares held by Pincoin Spirit's promoters and directors should not be allowed to be transferred for sale by depositories, the order said.
Pincoin Spirit is among the firms against whom Sebi initiated action on August 7 by ordering trading restrictions after it received the list of 331 'suspected shell companies' from the government.
The trading restrictions -- allowing trade only once a month and that too for only buy transactions with a 200 per cent security deposit -- were revoked in some cases a few days later, following appeals filed by the companies with the Securities Appellate Tribunal, but Sebi was asked to continue with its probe and pass its orders expeditiously.
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