Need clarity on definition of shell companies identified by Sebi: Sandeep Parekh

In an interview to CNBC-TV18, Sandeep Parekh, Founder of Finsec Law Advisors analysed what the Ministry of Corporate Affairs' order forwarded by Securities and Exchange Board of India (Sebi) to the exchanges means.

Three hundred and thirty one shell companies have been identified by the Ministry and Sebi has told exchanges not to allow trading in these companies except for first Monday of the month.

"Shell companies are not active. They do not have an operating income. They are just used to hold some shares and other investments and therefore they are static in terms of valuation," said Parekh.

However, need clarity on definition of shell companies identified by Sebi, he added.