| SEBI amplifies the modes for attaining Minimum Public Shareholding |
| As decided in the SEBI Board Meeting held on 16th August 12, SEBI has vide its Circular No. CIR/CFD/DIL/11/2012 dated 29th August 12 made amendments in the SCR Rules, 1957 and Cl 40A of Equity Listing Agreement. |
Vide the said Circular, SEBI has amplified the modes for listed companies to comply with the provisions of Cl 40A of Listing Agreement. Now, following additional modes have been allowed for attaining the minimum public shareholding:
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| SEBI has further opened the avenues for other modes as well, wherein, listed companies, desirous of availing any other modes, may approach SEBI seeking relaxation. SEBI may grant the same on a case to case basis. |
These new modes are in addition to the following existing modes, as provided in Cl 40A:
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| CP Comments: |
| The said amendments have been brought out in view of the large scale discussions going on amongst the corporate as well as media circles that the existing modes, as mentioned in the extant Cl 40A, may not be sufficient and in many a under-performing companies, no investors/ QIBs might be interested in investing therein, thus making all the efforts futile.
Since the last date (i.e. June ’13) is only 9 months away, these additional modes would surely interest the Promoters to comply with the requirements. Further, as per the media sources, the Regulators are quite serious about the Minimum Public holding norms and do not intend to extend the last date or accept any fall outs this time. In fact, in a situation where none of the specified modes suit a particular Company and it desires to follow any other mode, it may write to SEBI for a specific exemption, mentioning all the details. SEBI, if satisfied, may grant the same on a case to case basis. So, its advisable for listed companies not to wait for the last date and then taking steps to comply with the same, so as to avoid any penal/ other adverse action, including suspension/ compulsory delisting etc. |