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Market regulator SEBI on Wednesday prescribed additional disclosure requirements for encumbrance by promoters of listed companies.
In a circular, SEBI said promoters of every listed company should disclose detailed reasons for encumbrance if combined encumbrance equals or exceeds 50 per cent of their stake in the company.
Besides, promoters should also disclose the detailed reasons for encumbrance (such as end use of the money relates to any debt instruments such as debenture, commercial paper, certificate of deposit, and the name of the company in whose favour the encumbrance is made) if the combined encumbrance equals or exceeds 20 per cent of company’s share capital, the SEBI circular said.
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