New Delhi: Shareholder’s nod is not required for re-classification of promoter group members to public category, subject to certain conditions, securities and exchange board of India (Sebi) said on Monday.
Expressing its views on an application filed by Alembic Pharmaceutical Ltd, the regulator said such re-classification may be allowed by the stock exchanges under listing norms subject to certain compliances. Alembic Pharma had sought an informal guidance from Sebi on whether shareholders’ approval would be required and whether the company may directly approach the stock exchanges for permission under listing regulations.
The company had submitted to Sebi that five out of 25 persons of the promoter group have expressed the desire for re-classification of their shareholding from promoter group to public category. “Our view is that the company may not be required to obtain approval of the shareholders for the proposed re-classification,” Sebi said, adding that its response is based on the information given in the company’s letter.
“Different facts or conditions might lead to a different result. Further, this letter does not express a decision of the board on the questions referred,” the regulator said. Among others, the company submitted that the entities who wished to be re-classified are senior citizens and are not holding any control over the affairs and management of the company. The watchdog also said that its views are expressed with respect to clarification sought in terms of Sebi listing regulations and is not applicable for any other Sebi regulations.