Industry chamber Assocham on Sunday made a strong plea to Sebi saying non-compliant companies should be given three more months to comply with the regulatory requirements.
While making a strong plea to Sebi to take less stringent action against promoters of 105 companies which could not bring their holding to below 75 per cent, the industry body asked for “at least another three months to meet the guidelines on public holding.”
As per Sebi’s minimum public shareholding norms, all private sector listed companies need to have at least 25 per cent public shareholding, and promoters were asked to lower their stake to 75 per cent or below by June 3, 2013. For public sector firms, minimum public shareholding has been fixed at 10 per cent and the deadline is August 9, 2013. These norms were announced in June 2010 to ensure that the public investors get a larger presence and help create an equity culture in the country.
“While it is true that it has been three years since Sebi had asked listed firms to take firm steps to increase public holding, it must also be realised that selling stocks in the marketplace is a function of sentiments or else the promoters would be compelled to offload equity at a distress price.
“This is particularly true about the small and mid-cap companies,” Assocham Secretary General D S Rawat said in a statement. In a tough action, Sebi has restrained the promoter groups from raising funds from the market, barred them from selling and buying their company shares and receiving dividends in excess of 75 per cent ceiling.