PHDCCI argued that smaller companies may not have the financial resources to comply with certain regulations and may face greater challenges.
Industry body PHDCCI has urged capital market regulator Sebi to provide an early and easy process for small firms that wish to delist shares from Calcutta Stock Exchange.
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In a representation to Sebi earlier this month, the chamber has recommended a “single window system” or “one-time settlement scheme” for small companies wishing to regularize their functionality on CSE.
The chamber argued that smaller companies may not have the financial resources to comply with certain regulations and may face greater challenges in meeting regulatory requirements.
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An “amnesty scheme” or “minimum penalty” or “waiver” could help alleviate some of these challenges and encourage more companies to comply with regulations and also for the sake of the interest of shareholders, leading to erosion of capital of the small companies, PHDCCI said.
The chamber claimed that CSE is a non-trading exchange but is collecting listing fees every year from the companies that were listed decades ago.
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“The income of small companies is very low and some of them are facing losses. The CSE has imposed huge penalties on small companies for non-compliance or delay in compliances, which is eventually leading towards erosion of the total capital of the small company. The delay of compliance and a freeze on directors’ Dmat accounts are the main causes of companies wishing to delist from CSE,” PHDCCI said.
The chamber has highlighted that 32 companies have been suspended by CSE recently.
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Further delisting from CSE requires a company to be active/regular on the stock exchange first and then only can apply for delisting. Here the process is difficult for companies that have been suspended by CSE or have inactive accounts, it said.
Since the exchange suspended its own operations in 2013, there has been no trading or any other operation being carried out by the same, it said.
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“Early resolution to the issue of companies wishing to delist their shares from Calcutta Stock Exchange would go a long way to percolate Ease of Doing Business at the ground level and build confidence of the investors and efficiency in the markets,” PHDCCI President Saket Dalmia told PTI.
