The list of 331 suspected shell companies brought out by capital markets regulator Sebi ironically includes many going concerns, even those that are doing business with the government. J Kumar Infraprojects Ltd (J Kumar Infra) is one such entity, facing the regulator's wrath.
A Mumbai-based company, J Kumar Infra, which has seen trading suspended after the August 7 notification of Sebi with immediate effect, has bagged many Delhi and Mumbai Metro projects running into crores of rupees.
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Metro projects are predominantly government initiatives and therefore raises questions whether the projects were awarded without due diligence for the bidders or the exercise (of blacklisting entities) is an inappropriate one.
In a regulatory filing to the Bombay Stock Exchange (BSE) on Monday (August 7), J Kumar Infra listed a series of projects awarded by the Metro authorities and its business profile for the year 2016-17 to contest Sebi's claims.
"It is hereby clarified that J Kumar Infra is not a shell company and the suspicion of the regulator is uncalled for. Our company's compliance track record with the exchanges and Registrar of Companies is impeccable," the company said.
J Kumar Infra clocked net profit of Rs 105 crore on total revenues of Rs 1,466 crore and the order book as of March 31, 2017 was Rs 9,334 crore, largely comprising Metro projects, besides other government projects such as a bridge for the Thane Municipal Corporation, flyover in Mumbai, hospital in Rajasthan and sundry projects for port trusts, the company added.
The J Kumar Infra stock closed at Rs 283 on Friday last week (August 4) after ending at Rs 294 on August 1 on the BSE.
In another filing, the company had informed the stock exchange that its board of directors will hold a meeting to consider and declare the June quarter results on August 10 (Thursday).
J Kumar Infra also said in its regulatory filing on Monday that it would make efforts to remove its name from the list of shell companies. "We are seeking legal advice on the matter and we are approaching the regulator requesting it to recall its direction quo us," the company said.
While promoters hold 43.94 percent stake in the company, non-promoter shareholders include mutual funds including DSP BlackRock, Birla Sun Life, Reliance and HDFC according to the shareholding pattern as of June 30, 2017, filed by the company.
