A day after its deadline to meet the 25 percent minimum public holding norm, the market watchdog Sebi yesterday took a slew of punitive measures against the promoters of as many as 105 companies which failed to comply with its directive. The action include partially denying the rights of promoters to dividend, bonus and voting, apart from barring them from accessing the market other than for reducing their stakes in the company. Sebi said as many as 105 companies had failed to meet the public float norms within the stipulated deadline of June 3, despite repeated reminders and various relaxations provided to them.
The companies whose promoters and directors would face the prohibitoryorders include Adani Ports, BGR Energy Systems, Essar Ports, Omaxe, Plethico Pharmaceuticals and Tata Teleservices. These include 72 companies whose shares are actively traded on the markets, while the shares of 33 other companies are currently suspended for various reasons. Sebi said the sanctions will be lifted once the companies meet the shareholding norms.
The denial of voting rights in the companies which have not complied with the Sebi rules will be proportional to current promoter shareholding, which is three times the public shareholding. For example, if the public shareholding in a company is 10 percent, The promoters would be entitled to get only 30 percent of the total dividend paid by the company. That is to say that despite the promoter holding 90 percent in the firm, he will have to forgo 60 percent of the dividend. The same ban will apply for voting rights, bonus, rights offers, split etc, Sebi said in order passed by wholetime member Prasant Saran. The promoters and directors are also banned from holding any new position on the board of a listed firm. In a 13-page order, Sebi also warned of further action, including monetary penalties, initiation of criminal proceedings, and restricting trading activities of related stocks.
