The Securities and Exchange Board of India (SEBI) on Tuesday prohibited the promoters and directors of companies that failed to comply with the minimum public shareholding requirement of 25 per cent from dealing in securities of their companies till they complete the process.
In an order issued late in the night, SEBI said that 105 listed companies failed to comply with the minimum public shareholding of 25 per cent in those companies within the stipulated time period of June 3, 2013.
SEBI’s Whole-Time Member Prashant Saran also directed these companies to freeze the voting rights of their directors and promoters, and stop their corporate benefits such as dividend, rights, bonus shares and split with respect to the excess of proportionate promoter shareholding.
Further, the regulator restrained the shareholders forming part of the promoter group in the non-complaint companies from holding any new position as a director any listed company.
SEBI has asked these companies to file their relay within 21 days from the date of this order, i.e., June 4.
“I am of the considered opinion that the persons forming part of the promoter group and the directors of such non-complaint companies are mainly responsible for the non-compliance with the minimum public shareholding requirements within specified timelines,” said Mr. Saran.
“The promoter group of such companies would have an advantage on account of their disproportionate stake compared to the public in their respective companies,” he added.
