Why is SEBI forcing Prabhat Dairy to delist from the stock exchanges? What is this 6-month extension that SEBI has granted to Prabhat Dairy?
Answer
Answer
SEBI has acceded to the request made by Prabhat Daily and granted a 6-month extension to the company to complete the delisting process and other formalities. Shareholders of Prabhat had already approved the delisting in November 2019. The request for extension of delisting deadline was made by Prabhat considering the nationwide lockdown.
Under the SEBI revised order, Prabhat has to delist from the stock exchanges by 13 April 2021. The order to delist came after SEBI found reasons to believe that there was money laundered out of the books of the company. SEBI has also asked for a forensic audit of the company for 2018-19 and 2019-20, which had to be put off due to the pandemic.
SEBI has given the extension to Prabhat on the condition that they fully cooperate with the forensic auditor and furnish all relevant information within 10 days of the order to ensure timely completion. SEBI felt that any delay in the forensic auditor will have a deleterious impact on shareholder interests.