Mumbai, Oct. 2
STOCK brokers are irked by the Bombay Stock Exchange's decision to suspend trading in shares of companies that have not complied with listing norms, and revoking the same a couple of days later.
According to brokers, in recent cases, BSE had revoked its decision a couple of days after the announcement, but before the actual date of the commencement of suspension of trading. This, brokers said, makes their clients incur losses. Investors would try to sell shares at the best possible price as soon as they know that trading in them would be suspended soon. But they realise their losses only when they know that the stock exchange had revoked its decision before the date of suspension of trading.
For instance, on September 28, BSE came out with a notice announcing that trading in 13 companies' shares would be suspended from October 4, 2005 for non-compliance with the listing agreement. However, two days later, on September 30, the exchange said that out of these, four companies had complied with the submission reports and therefore, trading would not be suspended in these shares.
Similarly, on September 26, BSE had announced that trading in 14 companies' shares would be suspended from September 30. But on September 29, the exchange said trading in nine companies (out of the 14 companies) would not be suspended.
On September 17, BSE said trading in 39 companies would be suspended from September 22 for non-payment of the listing fees. Later, trading was allowed in shares of eight companies.
A BSE spokesman said companies were suspended from trading for not complying with the listing norms. But the exchange has to revoke its decision as and when they comply with the norms.
As per the listing norms of the stock exchange, companies have to pay listing fees, submit quarterly results, annual reports, corporate governance reports and the shareholding pattern. Companies also have to redress investors' complaints as per the listing agreement.
Brokers said if the companies are not complying with the listing agreement, they should first be shifted to the Z group, which has been created by the exchange for this particular purpose. If they still fail to comply with the agreement, they should be suspended by giving investors adequate time, say 30-45 days.