Mumbai: Stock market regulator Securities and Exchange Board of India (Sebi) said on Saturday that listed companies will not be provided any additional time to comply with the minimum public shareholding norms and that they will have to sell shares worth Rs.32,000 crore before the deadline expires in August next year.
Of the total, public sector companies’ share would be about Rs.11,000 crore, while the rest would be from private entities as per their July 2012 valuations, Sebi chairman U.K. Sinha said.
In late 2010, Sebi came out with norms saying government firms should have a minimum public shareholding of 10% and the private companies 25%. The deadlines were set for August andJune 2013, respectively.
Hinting that there will not be any extension to the deadline, Sebi chairman said despite giving avenues such as offer to sale and institutional placement plans, both of which were introduced earlier this year, companies have not come forward.
“It is a completely wrong assumption and argument that the three-year time frame given is too short a time frame,” Sinha said.
He pointed out that the time frame has “already crossed 11 years, definitely six years... What have we done? I don’t think it is anybody’s case that market was not good in 2007, 2008, 2009 and 2010”.
Sebi had first talked about minimum public float for listed companies in 2001.
Asked whether the regulator would impose penalty for non-compliance, Sinha said provisions are already in place if the companies violate Sebi nomrs. “...I would like to clarify that violation of listing agreement or violation of Securities Contract Regulation Rules...the consequences of that is already provided in various sections,” he said.
As of March 2012, 193 companies were non-compliant with minimum public shareholding norms, while 125 private entities had less than 20% public shareholding, Sinha said.
He noted, there were as many as 1,259 companies that did not submit their shareholding pattern as on March 2012.
“We have been receiving many representations. We have been telling them to follow the Sebi norms in letter and spirit. If you are only trying to do it in letter and not in the spirit of it, then Sebi is not going to be enthusiastic about it. We are examining those issues,” Sebi chief said.
Sinha was speaking at a conference organized by PHD Chamber on ‘Minimum Public Shareholding: Issues and Challenges’.
Sinha said Sebi was open to looking at more options that would help listed companies to comply with the public shareholding norms.
Meanwhile, BSE interim CEO Ashish Kumar Chauhan said that out of 4,967 companies listed on the exchange, only about 206 entities were yet to comply with minimum public shareholding guidelines.