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Market regulator Sebi has revoked the restrictions it had imposed on RMG Alloy Steel, its directors and promoters for alleged failure to meet the 25% minimum public shareholding norms.
However, Securities and Exchange Board of India (Sebi) has asked RMG Alloy to meet the minimum public shareholding requirements by February 6, 2014, failing which the curbs would be "immediately revived".
As per the norms, all listed private sector companies were required to have a minimum of 25% public holding by June 3. On June 4 the regulator had imposed curbs on the non-compliant firms including RMG Alloy Steel.
"...Hereby vacate the directions issued vide the interim order dated June 4, 2013 against RMG Alloy Steel Ltd, its directors, promoters and promoter group, with immediate effect," Sebi said in an order dated October 14.
Sebi said the June 4 order on RMG Alloy Steel and its directors and promoters would be revived if the promoter shareholding in the company "is not reduced to 75% or less" and public holding is minimum 25% "within February 6, 2014".
The February deadline is based on a order by Board for Industrial and Financial Reconstruction (BIFR) according to which RMG Alloy was given a five year time limit (from February 7, 2009 to February 6, 2014) to offload shares to bring the promoter shareholding down to 75%.
RMG Alloy was declared a "sick" industrial unit in August 1999 by BIFR after which it approved a scheme for the firm's rehabilitation on October 18, 2002.
In its June 4 order, Sebi had frozen the voting rights and corporate benefits of promoters/directors of 105 non-compliant firms and barred them from holding any new position on boards of listed firms, among others.
Further, the regulator had warned the firms of further actions including levy of monetary penalties, initiation of criminal proceedings, restricting the trading activities of related stocks and other possible directions.
