SEBI gets assurance from govt on meeting shareholding norms deadline

| | Updated on: Jun 06, 2013

The Securities and Exchange Board of India (SEBI) today said that the Government has assured it that the public sector units will meet the August deadline to bring down their promoters’ stake to 90 per cent.

“I have been assured by the Government that they will follow the deadline,” SEBI Chairman U.K. Sinha told reporters on the sidelines of the Skoch banking summit here.

As per the minimum public shareholding norms, the Government-run companies shall have a minimum public float of 10 per cent by August and private sector companies had to bring down the promoters’ stake to 75 per cent by June 3.

Currently, there are about 11 PSUs in which the Government holds over 90 per cent stake. These include MMTC, HMT, National Fertilizers, Neyveli Lignite Corporation, RCF, State Bank of Mysore and STC.

Despite giving three years to the private sector companies to reduce their promoters’ stake, as of June 3, there were as many as 105 companies which failed to meet the deadline forcing SEBI to take punitive actions against them.

On retail participation in the secondary market, Sinha said this is not at a level to be very happy about. “We had a requirement that promoters must have less than 75 per cent shareholding in a company.

“In spite of three years of time being given, while a large number of corporates followed our guideline, over 100 of them for some reason or the other could not do that. Very reluctantly SEBI had to take action against them two days ago,” he said.

Stating that higher public shareholding and faith in diversified ownership and governance is important, he said: “we believe if these things are implemented and followed, it will generate a lot of trust in the market.”

Published on March 12, 2018

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