There must be real protection of investors instead of harming investors by adopting practices that help company management and rob fortunes of investors.

[DEV KUMAR KOTHARI]

There must be real protection of investors instead of harming investors by adopting practices that help company management and rob fortunes of investors.

 Some of earlier article on related subject by author are:

https://www.taxmanagementindia.com/print/print_Article.asp?ID=764

Investor's protection: STOCK EXCHANGE MUST ACT IN INVESTOR FRIENDLY MANNER    April 19, 2010

https://www.taxmanagementindia.com/print/print_Article.asp?ID=873

Suspension and delisting -protecting investors or harming investors  July 13, 2010

https://www.taxmanagementindia.com/print/print_Article.asp?ID=10026

SEBI must be more forward looking and real time facilitator for security market and not an authority to make un-necessary legislations and business difficult. Too much regulations are counterproductive – first part September 28, 2021

In above articles some of aspects related with listing of shares, continuity of listing, suspension of trading, revocation of suspensions , delisting , relisting etc. and role of stock exchanges and SEBI have been discussed.

It is felt by general investors that Stock Exchanges and SEBI have in many cases acted in a manner that is not as per their objective. It is feeling that many  measures are in fact harming investors , more particularly small investors. Large number of companies have been  suspended and delisted. Now there are times that companies are trying to get suspension of revocation , relisting and continuing trading.

Revocations in 2023:

https://www.bseindia.com/corporates/IM_BY_REVOKED.aspx

Information Memorandum - Revoked Companies

PAGES 1-12 CONTAINS LIST OF SUSPENDED COMPANIES AND PROCESS OF THEIR REVOCATION OF SUSPENSION.

PAGE 1- 11 CONTAINS 25 NAMES AND PAGE 12 ONE NAME THEREFORE TOTAL  OF SUCH COMPANIES IS IS 276.

Example:

The first company in the list is

Security code 500322

PANYAM CEMENTS & MINERAL INDUSTRIES LTD. Revocation from  03.10.2023.

03/10/2023

On the above webpage we find link for Information Memorandum. Some important information from the point of view of investors, and regulatory authorities and Stock exchange are extracted below:

This is an information memorandum containing salient features of Panyam Cements and Mineral Industries Limited (‘The Company’) prepared for revocation of suspension on securities of the Company. THIS INFORMATION MEMORANDUM CONTAINS 9 PAGES

Date of suspension and reason for suspension :

22.10.2019 Non-compliance of SEBI Regulations and non-payment of Annual Listing Fees.

Panyam Cements and Mineral Industries Limited

The company was listed on Bombay Stock Exchange (BSE) since 1986 and is currently under suspension.

Company Website Address www.panyamcements.in

From the information memorandum and from the website of company we can find lot of information.

From webpage   https://www.bseindia.com/stock-share-price/panyam-cements--mineral-industries-ltd/pancm/500322/

We find that the company is presently listed ( after revocation) and traded. Recent  market trends for its share price are as follows:

Touched Upper Circuit Rs. 23.34	20 Oct 2023
Traded on new 52 Week High value 23.34	20 Oct 2023
Touched Upper Circuit Rs. 22.23	19 Oct 2023
Traded on new 52 Week High value 22.23	19 Oct 2023
Spurt in Volume by more than 1.74 times	19 Oct 2023
Touched Upper Circuit Rs. 20.21	18 Oct 2023
Traded on new 52 Week High value 20.21	18 Oct 2023
Touched Upper Circuit Rs. 18.38	17 Oct 2023
Traded on new 52 Week High value 18.38	17 Oct 2023
Touched Upper Circuit Rs. 17.51	16 Oct 2023
Traded on new 52 Week High value 17.51	16 Oct 2023

From website of company we find highlights as follows:

Panyam Cements & Mineral Industries Limited., has been established in the year 1955 in the most backward region of Rayalaseema(Kurnool Dist.,).The Company soon developed into one of the largest cement manufacturing unit in South India.

During the year 2005-06 the Company has been taken over by M/s.Nandi Group of Companies headed by Sri S.P.Y.Reddy(Industrialist & MP from Nandyal).Right from the takeover,the Chairman took the initiative to develop the Industry with the modernization of Kiln No.1.

From the last fifty seven years, the Company is providing livelihood to Thousands of its dependants. It started with 200Mts per day in the begining and reached to 2300 TPD after modernization. Sri .S.P.Y.Reddy is striving hard to bring back the yester years glory to Panyam Cements.

Highlights

Ever since the 1st bag of cement rolled out in 1957, the Company's Brand Name and its Producer stood for Strength,Quality&Reputataion. Panyam Cement established it's name by letting its hands in shaping number of Projects viz. Srisailam Project, Nagarjuna Sagar Dam(A.P), Koyana Project, Jayakawadi Project (Maharashtra), Almatti Dam ,Upper Krishna Project, Malaprabha Dam (Karnataka).

Apart from irrigation & Power Projects , Panyam Cements is also being used in large scale for construction of multi-storied buildings, Concrete Roads and many housing colonies & Township.

During 1970s, the Railway Ministry asked some Cement Companies to take part in supply of quality cement to manufacture Concrete Sleepers.(This view was taken by the then Central Government to Protect forest environment imbalances as hitherto, sleepers were made from forest food). Panyam Cement is one amongst them. Subsequently, Panyam Cements became the first Company in India to supply cement tp N.F. Railway where Panyam Cement has been used successfully to manufacture Concrete Sleepers under the strict supervisor of Railways.

In the era of 1960s,1970s & 1980s Panyam Cement war market leader all over South India, Maharashtra & Goa. But subsequently establishment of more & more Cement Plants, the Company's market is restricted to Rayalaseema of A.P, North & East Interior Karnataka, and some Northern parts of Tamil Nadu & Kerala.

Difficult times:

However, the Cement Industry went through severe crisis in 1999 consequent to the liberalization policy announced by the Government of India. In addition, due to paucity of working capital finance, the Cement Unit could not run continuously to its capacity due to various reasons.

Considering the worst situation prevailing in Panyam Cements as the workmen were striving hard for their livelihood, Sri S.P.Y. Reddy, B.E.(Mech) & Member of Parliament, who is a seasoned and successful technocrat having proven track record of more than 30 years as Chairman of Nandi Group of Companies has taken over the management of the company during September 2004 being assisted by Sri S. Sreedhar Reddy, an Engineering Graduate in Electronics and Telecommunications as Managing Director & CEO of the Company. The present management has invested amount for restarting the operations of the company. Immediately after take over the unit, the new management has settled the dues of Financial Institutions/Banks and also settled the dues of the workmen by implementing VRS. The present management has put in best efforts to revive the unit and put the same back on rails.

However, they could not run the cement plant at complete capacity thereby resulted in reduced turnover and profitability in the business. Further, the outbreak of novel Covid-19 virus has severely impacted the Company business operations and the Company was pushed to a situation where it could not meet its expenses.

Recent :

CIRP and change of management:

The company gone through Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code (IBC), 2016 and Dr. Srinisha Jagathrakshakan along with M/s. RV Consulting Services Private Limited and M/s. Sagar Power Limited became new promoters, thereby induced capital flow and revived the company.

The cement plant has been completely refurbished, begun its production, marketing its cement in and around Andhra Pradesh, which is expected to be spread all over South India in coming days.

Under link https://www.panyamcements.in/cirp.html

We find

CIRP

IDBI TRUSTEESHIP SERVICES LIMITED VERSUS PANYAM CEMENTS AND MINERAL INDUSTRIES LIMITED - 2020 (5) TMI 682 - NATIONAL COMPANY LAW TRIBUNAL, AMARAVATI BENCH

21st May,2020-1--Form A - Public Announcement - Panyam Cements and Mineral Industries Lim.pdf

21st May,2020-2--FORM B -PROOF OF CLAIM BY OPERATIONAL CREDITORS EXCEPT WORKMEN AND EMPLOYEES.docx

21st May,2020-3--FORM C -SUBMISSION OF CLAIM BY FINANCIAL CREDITORS.docx

21st May,2020-4--FORM D- PROOF OF CLAIM BY A WORKMAN OR AN EMPLOYEE.docx

21st May,2020-5--FORM E- PROOF OF CLAIM SUBMITTED BY AUTHORISED REPRESENTATIVE OF WORKMEN AND EMPLOYEES.docx

21st May,2020-6--FORM F- PROOF OF CLAIM BY CREDITORS (OTHER THAN FINANCIAL CREDITORS AND OPERATIONAL CREDITORS).docx

List of Claims Upload 27-07-2020.pdf

Public Announcement of Form G on 28th July 2020

Process document for Expression of Interest

List of Claims as on 12th Aug 2020

PCMIL EOI Dcouments - (29.08.2020)

PCMIL Form G Revised on 29 Aug 2020

Teaser - Panyam Cements and Mineral Industries Limited

List of Claims as on 15th Sep 2020

List of Claims as on 04th Nov 2020

Revised Form G Dated - 27.10.2020

List of Claims as on 15th Jan 2021

List of Claims as on 23rd Feb 2021

28th July 2020 – Section 29A – Persons not eligible to be resolution applicant

List of Claims as on 16th Mar 2021

05th May 2021 Publication of Financial Result for the FY 2019-20

List of Claims as on 15th May 2021

List of Claims as on 20th May 2021

Resolution Plan approval order passed by the Hon’ble NCLT on June 25, 2021.

A Rectified order passed by the Hon’ble NCLT for approval of the Resolution Plan

Amount paid to Govt. Authorities

Govt. Claims with DD No

                      

Investors page https://www.panyamcements.in/investors.html

Investors

Panyam Cements & Mineral Industries Limited is dedicated to enhancing shareholder value by strengthening its leadership position in a competitive environment. We have long been recognized as a financially stable and well respected company in the investor community. Our proven business model, deep engagement with customers, robust systems and processes, strong focus on creating value for our customers, and a strategic business mix have all provided the resilience required to withstand economic uncertainties. We believe in steady growth even in volatile markets, and we continue to maintain our strategic goals and improve our competitive position in today's global economy. Access the latest financial news and information about Panyam Cements & Mineral Industries Limited.

https://www.bseindia.com/stock-share-price/panyam-cements--mineral-industries-ltd/pancm/500322/corp-actions/

Corporate Actions

Purpose Rs. Ex-date Book Closure/Record Date Resolution Plan -Suspension -- 29 Jul 2021 RD 30/07/2021   -- 13 Sep 2006 BC 25/09/2006-27/09/2006 NIL Dividend -- 28 Aug 2002 BC 16/09/2002-21/09/2002

From other websites also we do not find any hint of dividend payment. As per BSE website above information makes it clear that only book closure might be announced but it was for NIL Dividend.

Observations of author:

The company is a very  old company and has seen good and bad times both.

It appears that Company raised capital from investors but forgotten to service them.

There is no information available about dividend paid, if at all

Company failed to make compliances and even did not pay listing fees. Causing suspension of companies trading at BSE.

This caused loss to shareholders, particularly small investors who can hardly do anything to protect their interest.

A cursory glance on information available in respect of other companies who got revocation of suspension also  suggest that for a long period there was suspension mainly due to noncompliance and  nonpayment of listing fees. It is surprising that management is getting their rewards from companies directly or indirectly and are becoming rich personally and companies are suffering in a manner designed to rob small investors in a legally and dignified manner.

Stock exchange and SEBI must act to protect investors:

Suspension and delisting seems  easy way for Stock exchange ad SEBI. These measures might have been used by dishonest promoters to get rid of investors and regulatory measures for time being.

It is surprising that Stock Exchanges are allowed to charge and accumulate their outstanding annual listing fees even after suspending companies from trading. At the time of suspension and relisting recovery may be made fully or partly from companies.

Stock exchanges and SEBI have large funds. Those can be used to protect interest of investors including by timely action for avoiding suspension of trading.

On suspension of trading small investors suffers. Experience shows that many times company management ( old or new) acquire shares in various ways at very low price and then take steps for revocation of suspension and resuming trading at high price. In spite of many regulatory measures, management of companies are able to strengthen their holding by eliminating small investors who are large in number and large in total investment.

Many companies in the revocation list of 2023 are such companies who resumed trading at higher price but with regulatory mechanism that goes against small investors interest and help management of companies to get listed, improve stock price. There are many  companies without any significant improvement  in working but stock prices have improved.