To discourage the growing trend of delisting of securities from the Indian bourses, the Centre has proposed stringent norms including the need to get the approval of three-fourths shareholders before delisting a company.
The government has issued draft guidelines and invited comment from the public on the proposed amendments in the delisting norms.
Under the proposal, a company can be delisted from the bourses at the request of the promoters only if "the delisting of such securities has been approved by three-fourths of the shareholders in a general body meeting.
Besides, the securities have to be listed for a minimum period of three years."
In case stock exchanges delist companies suo-motu for non-fulfilment of listing agreements, the draft guidelines specify that the company can be delisted only in one of the three circumstances: The company has incurred losses during the preceding three consecutive years and its net worth has reduced to less than its paid-up capital, trading in the securities of the company has remained suspended for a period of more than six months, or the securities of the company have remained infrequently traded during the preceding three years.
The new delisting rules can come into force only after necessary amendments are brought about in the Securities Laws (Amendment) Act 2004.