SEBI talks tough on non-compliance of minimum public shareholding
Taking action against stock exchange listed companies who have not yet complied to the minimum shareholding rule of market regulator Securities and Exchange Board of India (SEBI), the regulator has directed freezing of voting rights and corporate benefits of promoter groups of these companies with respect to the excess of proportionate shareholding till such time they comply. Restrictions have been put on their dealing in the non-compliant shares and in becoming directors in other companies.
In June 2010, the rules were amended to provide for minimum and continuous public shareholding of 25% in private listed companies. The deadline was June 3, 2013, on which date some 100-odd companies were found to be non-compliant. The regulator is now proceeding against them.
SEBI had given ample time to the companies to comply. It even introduced two new methods — the Offer for Sale (OFS) and the Institutional Placement Programme (IPP) — to expedite the share divestment.
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