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Public float defaulters would face action: Sebi

New Delhi, June 30, 2013, PTI:

2 dozen cos have initiated steps to comply with norms

Capital markets watchdog Sebi has initiated the process of fresh penal actions against companies having defaulted on minimum public holding norms, with a stricter crackdown against ‘wilful defaulters’.

At the same time, Sebi has also stepped up its efforts to engage with about a dozen listed public sector companies, which need to achieve minimum 10 per cent public float by sale of shares worth an estimated Rs 3,000 crore before a separate deadline of August 8.

The deadline for private sector listed companies to achieve minimum 25 per cent public shareholding expired on June 3, following which Sebi had taken interim actions against 105 companies that failed to comply with the norms.

As per Sebi’s interim order dated June 4, these companies were given 21-day time to present their case before the regulator with regard to their non-compliance.

“As the time to respond to the Sebi show-cause notice has expired, the regulator is now considering further actions against defaulters for the minimum public holding norms,” a senior official said.

While some companies made made genuine efforts to meet this regulatory requirement of having minimum 25 per cent public float, Sebi has also come across certain “wilful defaulters” who did not make any visible attempts to increase the public shareholding, he added. Since the time Sebi passed its interim order, about two dozen companies have initiated steps to comply with the minimum public holding norms and some of them have already complied with the norms.

However, the final Sebi action against the defaulter companies and their promoters would be taken after taking into account the efforts made by them in meeting the norms, the official said, while adding that the regulator would also try to safeguard the interest of minority shareholders.

The actions being considered against defaulter companies and their promoters and directors include levying of monetary penalties, initiating of criminal proceedings, moving their shares to restricted trade categories, among others.

 

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