Personal Finance

A bombshell from SEBI

| Updated on January 09, 2018


Shares of 331 companies suspected to be ‘shell’ entities have been subject to trading restrictions by the market regulator SEBI. Reports in the public domain suggest that many of these companies are facing probes for alleged tax evasion and corporate frauds. So the regulator may be right in such cases. Some others are worth a scrutiny too.

Out of the 162 BSE companies, for instance, 23 have reported nil sales for 2016-17. These include companies such as Cals Refineries, Oxford Industries, Noesis Industries and Koffee Break Pictures.

At the same time, some of those with genuine operations/notable turnover and considerable public shareholding have also been caught in this net.

If you, unfortunately, hold shares of some of the blacklisted companies, trading, which was suspended from August 8 , 2017 onwards, will now be permitted only on the first Monday of every month. Thus, your money will now be locked up in an illiquid investment.

However, there can be some respite. Given the lack of proper due diligence on SEBI’s part and a clear definition of ‘shell’ companies, the Securities Appellate Tribunal (SAT) ordered SEBI to lift trading restrictions on shares of companies such as J Kumar Infraprojects, Prakash Industries, Parsvnath Developers and Kavit Industries which had appealed to SAT. A few others such as SQS India BFSI have also appealed to SAT.

More banks cut savings rates

Following SBI, Axis Bank and Bank of Baroda have cut interest rates on savings accounts by 50 basis points to 3.5 per cent for deposits up to ₹50 lakh.

On the other hand, Karnataka Bank has brought in four variants. Earlier, the private bank was offering 4 per cent irrespective of the amount in the account.

Now, it has raised interest rates on savings bank account for balances above ₹1 crore to 5 per cent; savings rate for balances below ₹1 lakh is now at 3 per cent; rate for balances between ₹1 lakh and ₹50 lakh will be 3.5 per cent, while ₹50 lakh-₹1 crore will be given 4 per cent.

Aadhaar for death certificates

Nothing is certain except death and taxes, someone said. For both, Aadhaar is now needed for paperwork. The quoting of Aadhaar or Aadhaar enrolment number was made mandatory for filing tax returns this year. From October 1, Aadhaar number will be required to establish the identity of a deceased person for registration of death.

The onus is on the person applying for the death certificate to provide the Aadhaar number or enrolment id of the deceased. There is some relaxation though. If the person applying does not know whether the deceased possessed an Aadhaar number or if the deceased did not have an Aadhaar number, the applicant could submit a certificate saying that the deceased did not possess Aadhaar to the best of the applicant’s knowledge.

The rule will come into force in all States except Jammu and Kashmir, Assam and Meghalaya. This move is directed towards preventing frauds due to theft of identity of a deceased person.

Published on August 13, 2017

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