Press Esc to close
Monday 20 October 2014
News updated at 11:09 PM IST
Weather
Max: 30.8°C
Min : 20.1°C
In Bangalore
Sunny day

3-year disclosure must for promoter share transfer

Mumbai, Dec 7, 2012, DHNS:

The Securities and Exchange Board of India (Sebi) has said promoters of a listed company need to make their shareholding disclosures at least three years before any transfer of shares between themselves without triggering an open offer for public investors.

Sebi has made it clear that disclosure as promoters in the shareholding pattern filing is a must for at least three years to get an exemption from the open offer, even if the company has been listed for a shorter period of time. 

If the shareholding of any entity hits 25 per cent threshold limit in a listed company, it is required to make an open offer for an additional 26 per cent shares from the public shareholders of the company. 


All the same, the market regulator has said that the open offer is not triggered if the threshold is hit because of transfer of shares between two promoters, who have been listed as promoter entities in the company’s shareholding pattern filings for at least three years, besides some other conditions.

The aforementioned observations were made by Sebi in an ‘interpretive letter’ sought by a company, the Commercial Engineers and Body Builders Company Ltd which has been listed on the BSE and the NSE since October 18, 2010.

Since the company had been listed for less than three years, it had sought an “informal guidance” from Sebi on whether one of its promoters, Ajay Gupta, could transfer shares to another promoter and his father-in-law Kailash Gupta without any open offer requirements.  

“Since the company was listed in October 2010 only, the shareholding pattern in terms of the listing agreement is available only for two years. Thus, prima facie the promoters do not qualify for the inter-se transfer since they are not complying with one of the pre-requisites (mentioned as the first condition),” Sebi said.

Go to Top

Photo Gallery
Army recruits during their attestation parade at Madras Regimental Centre, Wellington, Ooty on...

Army recruits during their attestation parade at Madras Regimental Centre, Wellington, Ooty on...

In this Wednesday, Oct. 15, 2014 photo, a Kashmiri woman blocks a road during a protest demanding...

In this Wednesday, Oct. 15, 2014 photo, a Kashmiri woman blocks a road during a protest demanding...

Prime Minister Narendra Modi at the 42nd Convocation of the All India Institute of Medical...

Prime Minister Narendra Modi at the 42nd Convocation of the All India Institute of Medical...

Devendra Fadnavis hugs his mother Savita after his victory during the Assembly election in...

Devendra Fadnavis hugs his mother Savita after his victory during the Assembly election in...

Union Minister of State for Commerce and Industry, Nirmala Sitaraman launching the Online Export...

Union Minister of State for Commerce and Industry, Nirmala Sitaraman launching the Online Export...

Prime Minister Narendra Modi with BJP President Amit Shah after the party's parliamentary...

Prime Minister Narendra Modi with BJP President Amit Shah after the party's parliamentary...

In this Oct. 17, 2014 photo, a thick blanket of smoke is seen against the setting sun as...

In this Oct. 17, 2014 photo, a thick blanket of smoke is seen against the setting sun as...

In this Monday, Oct. 13, 2014 photo, an Indian woman uses her hand to put sawdust in an...

In this Monday, Oct. 13, 2014 photo, an Indian woman uses her hand to put sawdust in an...

(L-R) Asha Bhat, Miss Diva Universe 2014 2nd runner up, Noyonita Lodh, Miss Diva Universe 2014...

(L-R) Asha Bhat, Miss Diva Universe 2014 2nd runner up, Noyonita Lodh, Miss Diva Universe 2014...

An Indian man teaches yoga postures to schoolchildren at Delhi Public School in Hyderabad...

An Indian man teaches yoga postures to schoolchildren at Delhi Public School in Hyderabad...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523