Firms penalised for missing shareholding rule deadline

SEBI had asked all listed private companies to cut the stake held by promoters, or key shareholders, in their companies to a maximum of 75% by June 3

 

T he Securities and Exchange Board of India (SEBI) has penalised promoters of 105 companies, including Adani Ports and Special Economic Zone Ltd and Tata Teleservices Maharashtra Ltd, for failing to comply with its minimum public shareholding rule.

 

The SEBI had asked all listed private companies in India to cut the stake held by promoters, or key shareholders, in their companies to a maximum of 75% by June 3.

 

In the order issued late on Tuesday, SEBI said promoters of companies that failed to meet the deadline would be prevented from receiving dividends and exercising their voting rights on excess shares that breach the 75% limit.

 

Promoters who missed the deadline will also not be allowed a board seat in any listed company in India.

 

SEBI also prohibited promoters and directors of the defaulting companies from dealing in shares of their companies, unless done explicitly to reduce their stake.

 

However, these penalties would cease to apply if the companies cut down their stakes to 75%.