Mumbai: Premier bourses BSE Ltd (BSE) and National Stock Exchange of India Ltd (NSE) have decided to suspend trading in securities of companies found to be non-compliant with listing agreement clauses relating to corporate governance norms and shareholding disclosures.

Trading has been suspended by the BSE in shares of as many as 16 companies. The NSE has announced similar action against four companies, three of which—including Birla Power Solutions—are also part of the BSE list.

While trading in securities of the companies would be suspended from 26 August, the exchanges also ordered freezing of the entire promoter shareholding of these firms with immediate effect till further notice.

Capital markets regulator Sebi (Securities and Exchange Board of India) asked the stock exchanges last year to put in place standard operating procedure (SOP) for suspension and revocation of equity shares of listed entities for non-compliance of certain clauses of the listing agreement.

Accordingly, the two bourses have taken action against companies which have been found to be non-compliant to clauses related to corporate governance and timely disclosure of shareholding patterns for two consecutive quarters—October-December 2013 and the quarter ended 31 March 2014.

In case any of these companies comply to the satisfaction of the exchange, with all the provisions of the listing agreement including payment of fines on or before 20 August 2014, the trading in their securities “will not be suspended".

Otherwise, the suspension will continue till such time the company complies including payment of fines.

The revocation of suspension would be subject to the companies further complying with the procedure and all extant norms prescribed for revocation of suspension.

According to separate circulars issued by the NSE and the BSE, 15 days after suspension has been effected, trading in the shares of non-compliant companies would be allowed on restricted basis or in “Trade for Trade basis in Z group" only on the first trading day of every week for six months.

The four companies whose share trading has been suspended by NSE are Asian Electronics Ltd, Birla Power Solutions Ltd, KDL Biotech Ltd and Kitply Industries Ltd.

The companies on the BSE’s suspension list include Anu’s Laboratories Ltd, Asian Electronics, Birla Power Solutions, CCS Infotech Ltd, Dhanus Technologies Ltd, Excel Glasses Ltd, Hanjer Fibres Ltd, In House Productions Ltd, Indo Bonito Multinational Ltd, KDL Biotech, Krishna Ferro Products Ltd, Rishab Financial Services Ltd, Rockland Thermionics Ltd, S.S. Forgings and Engineering Ltd, Fact Enterprise Ltd and Texplast Industries Ltd.