Government official says trading in 12 suspected shell companies likely to resume

A leading business daily quoting government officials reported that trading in about a dozen shell companies may resume in a week’s time.

Ministry Of Corporate Affairs had identified 311 entities as shell companies that were violating Income Tax rules. The ministry said that it has taken actions against some companies that saw a jump in trade during the demonetisation drive.

A shell corporation is a corporation without active business operations or significant assets. These types of corporations are not necessarily illegal, but they are sometimes used illegitimately, such as to disguise business ownership from law enforcement or the public and to evade taxes.

SEBI on Tuesday had put these scrips under surveillance and restricted their trading to only one day per month as part of efforts to curb black money menace. According to SEBI’s directive, trading in all such listed securities shall be placed in Stage VI of the graded surveillance measure (GSM) with immediate effect.