New Delhi: Market regulator Securities and Exchange Board of India (Sebi) has asked all the listed companies in the country to make disclosures on shares pledged by promoters within seven days and has amended the relevant regulations on this.
Following its decision at a board meeting held on 21 January, the regulator has outlined the norms for disclosure about pledged promoter shares in an amendement to the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
Sebi’s decision to make it mandatory for promoters to disclose pledged shares follows troubled IT firm Satyam Computer revealing in January that all its promoter shares were pledged with lenders and a large portion of that had been sold.
The Sebi board had decided in its meeting on 21 January that such disclosures should be made as and when the shares are pledged as well as by way of periodic disclosures.
The regulator has said that details of pledging and release or sale of pledged shares should be made to the company, which in turn would inform the public about it through the stock exchanges.
The new regulations, approved by Sebi chairman C.B. Bhave and the regulator board, make it mandatory for the promoters of a company to disclose details of shares pledged by them to the firm within seven working days of commencement of the amended regulations.
The new regulations came into force with their publication in the Government of India Gazette on 28 January.
Besides Satyam, companies such as Pyramid Saimira, Rolta India, Godrej Consumer, Mindtree, Asian Paints and Temptation Foods have disclosed share pledging by their promoters.