The capital market regulator has issued a stern warning to companies that are taking lightly the requirements of the minimum public shareholding norms.
The watchdog has made it clear that the deadline will not be extended and the non-compliant entities will be seriously dealt with. Speaking at a seminar, the Securities and Exchange Board of India (Sebi) chairman UK Sinha said enough time has been given to companies to comply with the regulations and there will be no extension.
?The companies and their advisors are perhaps thinking that this time limit will be extended. But let me tell you, that I am going to make it difficult,? he said. ?This is a very important requirement. Three years? time-frame has been given, more than one-and-half years are over, but there is absolutely no movement towards it,? he added.
According to the minimum public shareholding norms, promoters of all listed companies have to bring down their stake to 75% by 2013. The deadline for private companies is June 2013, while that for public sector undertakings (PSUs) is August 2013.
According to the Sebi chairman, there are 181 non-PSUs, which are yet not compliant with these regulations. If the PSUs are also taken under consideration, then shares worth nearly R40,000 crore will have to be sold by listed entities to comply with the norms, said Sinha.
The chairman also highlighted the fact that new avenues for stake sale have been opened up by the regulator, but still companies appear to be not interested in moving towards meeting the regulatory requirement.
?I don’t really know why companies are not coming forward. We received one request that the avenues for divestment are limited. Sebi has provided two more avenues ? OFS and IPP. So, that requirement from the industry has been met by Sebi,? he said, adding that any request for making the process simpler will be looked into.The Sebi chairman also said that the regulator has already taken a view of amending the Manner of Increasing and Maintaining Public Shareholding in stock exchanges (MIMPS) norms and the new regulations would be place in the nest two months. The regulator is reviewing the initial public offer (IPO) norms and is expecting to complete the process in the next 3-4 months. The consent order guidelines will also be announced in another four weeks, he said.
?We are having a serious re-look at the entire IPO process. We are going to have more orderly disclosures, at the same time making the forms simpler. The ability of investors to participate we are going to augment it tremendously. In the next 3-4 months, the entire IPO process will be redone,? he said.