Promoters of private companies that have not met SEBI’s minimum public shareholding norms deadline of June 3 may face the regulator’s wrath. Contrary to expectations of several market players, SEBI has not announced any blanket extension of the deadline.
Even as nine more companies rushed to meet the deadline by opting to trim their promoter stake through Offer For Sale on the BSE and NSE, there may be hope for non-compliant firms as SEBI could extend the deadline on a case-by-case basis.
According to the National Stock Exchange, 46 companies on the bourse are yet to comply with the norm of capping the promoter holding at 75 per cent and the minority shareholding at 25 per cent.
People in the know of developments said the regulator could deal with the erring promoters in three ways — restrain/curtail promoters’ rights to deal in shares, penalise promoters and ask them to comply with a possible extended deadline, or even prosecute them.
Gaurav Dua, Head of Research at ShareKhan, said: “It is highly unlikely that SEBI would go in for compulsory delisting of the defaulting companies as it has clarified that it would not take any action that hurts the interest of retail shareholders. It could, however, take a lenient view on those cases where, despite the promoters’ efforts, the offer for sale (OFS) did not sail through. Owing to poor market conditions, the liquidity crunch and last-minute rush, resulting in oversupply, the response to OFS has not been encouraging.”
According to a BSE spokesperson, a list of 76 companies that have met the deadline through the offer for sale route was forwarded to SEBI on Monday. “This list includes companies that have pared promoter stake through OFS on both the NSE and BSE and only on BSE. After it receives a similar list from NSE, SEBI will prepare a concrete list and decide the course of action against the remaining companies.”
Our Kolkata Bureau reports : Proxy advisory firm InGovern told Business Line : “Based on shareholding pattern as of March 31, 2013, our analysis of the companies of the BSE-500 index suggests 37 companies are yet to be compliant with the minimum public shareholding norms. Of these, 8 are public sector units and 29 private companies.”
InGovern’s MD, S. Subramanian, added: “Of the 29 private companies, five got listed with a post-issue capital of more than Rs 4,000 crore and, hence, have a three-year post-listing window to adhere to the revised norms. Seven of these companies are listed subsidiaries of MNC firms”.