Cracking the whip on promoters of over 100 private sector companies who failed to attain minimum 25 per cent public holding,Sebi on Tuesday ordered freezing their voting rights and corporate benefits and barred them from holding any new position on boards of listed firms. The promoters and directors of non-compliant companies have also been barred from dealings in the market and holding new positions on the boards of listed entities till the time those companies comply with the minimum public shareholding requirements. While Sebi chairman UK Sinha had been constantly warning the promoters who fail to comply with strict actions,he told The Indian Express that Sebi will act tough but will ensure that the minority shareholders are not affected. A day after the deadline ended,Sebi,in a 13-page late night order on Tuesday also warned of further actions including levy of monetary penalties,initiation of criminal proceedings,restricting the trading activities of related stocks and other possible directions. Sebi said a total of 105 companies failed to meet the norms within the stipulated deadline of June 3,despite repeated reminders and various relaxations provided to the companies to help them meet the requirements. Out of this,there are 70 active companies,two were previously compliant but now non-compliant and the remaining are suspended companies. The companies whose promoters and directors would face the prohibitory orders,which have come into immediate effect,include Adani Ports and SEZ,BGR Energy Systems,Essar Ports, Chettinad Cement Corporation,Omaxe,Sundaram Clayton,Plethico Pharmaceuticals,Transformers and Rectifiers (India),Nagarjuna Agrichem and Tata Teleservices (Maharashtra). In February 2012,Sebi has allowed Offer for sale and Institutional placement programme as additional means for promoters to bring down their shareholding. While 30 companies adopted the offer for sale route in the month of May to meet the regulatory requirement,a large number of companies still failed to do so,forcing Sebi to initiate action. The actions announced by Sebi against promoters include direct freezing of voting rights and corporate benefits like dividend,rights,bonus shares,share split etc.,with respect to the excess shares held by the promoters beyond the 75 per cent limit,till the time these firms comply with the norms. The companies and their promoters and directors have been asked to file their replies,if any,to the Sebi order within 21 days. The minimum public holding norms,seeking at least 25 per cent public shareholding,were notified on June 4,2010,requiring compliance by the private sector listed companies within three years and this deadline ended on June 3. The PSU companies are required to have at least 10 per cent public shareholding by August 8,2013. IN THE DOCK Among the firms that did not meet the norms are: * Adani Ports and SEZ * BGR Energy Systems * Essar Ports * Chettinad Cement Corporation * Omaxe * Sundaram Clayton * Nagarjuna Agrichem * Tata Teleservices (Maharashtra) * Transformers & Rectifiers (India)
