NEW DELHI, May 22: More than 2,000 companies listed on the Delhi Stock Exchange (DSE) have not been traded on the bourse in the past six months.Of these, about 1,300 companies have gone untraded since May 1995. This has left thousands of investors stuck with shares worth hundreds of crores of rupees.

There are scores of scrips which have not attracted a single investor in the past 25 years. For about 900 companies, there is no record of trading available with the DSE.

Though some of these companies are believed to be closely held and were listed when the paid-up capital requirement for listing was merely Rs 25 lakh, a majority of them raised money from the public through issues.

Marketmen said that most of these shares had become "junk scrips" as these companies had either wound up their operations or were in existence only on paper.

Take the case of Bharat Nidhi, which was last traded on December 20, 1970, or Arjun Minerals, which has not seen any trading since 1978, and Amausi Textile (since February 1978).

What could be most worrisome for investors is that DSE is the regional stock exchange for a large number of companies.

Since these scrips have not been traded for years at the regional exchange, there is virtually no hope for shareholders of these companies to recover their investments.

Most of these companies have huge arrears of listing fee to the stock exchange, which reflects their total disregard towards investors, a DSE official said.

DSE recently estimated that the total outstanding of listing fee arrears from about 1900 companies was about Rs 3.50 crore.

Of this, about Rs 2.25 crore listing fee is due from 1,000 companies for 1996-97 while Rs 1.25 crore is due from 900 companies for 1995-96 and before.As per the finance ministry guidelines, the stock exchange can delist a company if it incurs a loss during the preceding three consecutive years and its net worth has been reduced to less than its paid-up capital.

The stock exchange can also delist a company if the securities of the company have remained infrequently traded during the preceding three years.

Though stock exchanges can conveniently delist the companies not fulfilling these parameters, they often do not. As veteran DSE member KK Bajaj said: "Delisting a company means punishing the small investors than the company and its promoters. There is no hope for realisation of money once the company is delisted."

Experts feel that the only way of ensuring that a scrip is traded on the stock exchange to give shareholders an exit route by introducing market-making. Says another DSE member YK Sharma, "Market-making will go a long way in restoring investor confidence in the primary as well as secondary market."

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.