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Hearing of the petition was postponed to 29th August due to lawyer's strike. The PIL filed by Midas Touch alleges that SEBI has not taken any action against companies which do not follow listing norms
Around one crore small investors will have to wait till 29 August 2012 to know the future of their locked investment as the public interest litigation (PIL) filed by Midas Touch Investors’ Association (MTIA) in the Delhi High Court was adjourned on Thursday.
“The petition came up for hearing today before the bench of acting chief justice AK Sikri and justice Rajiv Sahai Endlaw but it was adjourned without hearing due to the lawyers strike, said Virendra Jain, president of MTIA.
The PIL alleged that market regulator, Securities and Exchange Board of India (SEBI) has not taken any action against thousands of companies that failed to comply with the terms of listing agreement. “Trading in most of these companies has been suspended and investors’ hard earned money worth over Rs1 lakh crore is blocked, and perhaps gone down the drain, with all its ramifications on the health of the securities market,” the petition said.
According to the PIL, there are 1,845 companies on the BSE that have failed to comply with the listing agreement. The number of such companies on the National Stock Exchange (NSE) is 203.
Market regulator SEBI is empowered to impose a penalty of Rs25 crore on these companies under the Securities Contracts (Regulation) Act, however, there is no action yet.
Both BSE and NSE submitted detailed information of these companies to SEBI. The market regulator appointed a committee for suggesting action against these companies. However, despite receiving the committee’s report, SEBI has not taken any action against the defaulting entities, the PIL alleged.
The petition also requested the HC to direct SEBI to frame regulations for protecting investor interest and also implement an action plan for effective monitoring companies, which were listed on stock exchanges at Hyderabad, Magadh and Saurashtra which are now de-recognised.
Both BSE and NSE have also been made respondents in the petition by MTIA.
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