SEBI to crack the whip on defiant promoters
Warning the promoters of tough penal action if they do not bring down their holding in listed firms to minimum 75% by next month, market regulator SEBI has said it will try to ensure that the public investors do not suffer because of the majority shareholders’ defiancebusiness Updated: May 27, 2013 00:41 IST
Warning the promoters of tough penal action if they do not bring down their holding in listed firms to minimum 75% by next month, market regulator Securities and Exchange Board of India (SEBI) has said it will try to ensure that the public investors do not suffer because of the majority shareholders’ defiance.
As per SEBI’s minimum public shareholding norms, all private sector listed companies need to have at least 25% public shareholding and promoters have been asked to lower their stake to 75% or below by June 2013.
For the public sector companies, the minimum public shareholding has been fixed at 10% and the deadline is till August 2013. These norms were announced in 2010 to ensure that the public investors get a larger presence and help create an equity culture in the country.
“The companies were given three years to comply with these norms and this timeframe should have been sufficient for anyone willing to meet the guidelines,” SEBI chairman UK Sinha told PTI in an interview. “Now if we find that a company has decided consciously not to follow the guidelines, I would assume that they are doing it willingly and therefore they are willing to face the consequences.”
Without specifying the penalties for the non-compliant companies, SEBI chief said: "What these consequences would be, that would depend broadly on two parameters — the intent of the promoters and the interest of minority shareholders.”
First Published: May 27, 2013 00:38 IST