SEBI gets tough with companies with high promoter holding

Companies where the promoter holding was more than 75% at the end of September quarter include DLF, Jet Airways, Wipro, Tata Communications, Tata Tele, Sun TV, L&T Finance, Omaxe, Fortis Healthcare and Reliance Power

New Delhi: About 200 listed companies with promoter stake of more than 75% are set for some tough talk from Securities and Exchange Board of India (SEBI), which is mulling options including monetary penalties and eventual delisting of non-compliant entities, reports PTI.


The deadline for all private sector listed companies to bring down their respective promoter shareholdings to 75% or below is now just seven months away and the regulator has begun the process of identifying those entities that have initiated any process for adhering to this requirement.


"In the first phase, the SEBI has initiated a consultative process with such companies, wherein the regulator is asking them to provide a plan of action to achieve compliance and to resolve all outstanding issues," a senior official said.


The regulator will also inform these companies, whose number is estimated to be more than 200, about the potential penalties and other regulatory actions they might face in case of non-compliance, he added.


In the second phase, SEBI plans to ask stock exchanges to monitor compliance to these 'plans of action' on steps being taken to increase the public shareholding to a minimum of 25% and issue notices to the non-adhering firms.


At the same time, investors in these companies would also be informed about the potential risks they face due to penal actions to be taken against such entities, the official added.


Major companies where the promoter holding was more than 75% at the end of last quarter (September 30) include DLF, Jet Airways, Wipro, Tata Communications, Tata Tele, Sun TV, L&T Finance, Omaxe, Fortis Healthcare and Reliance Power.


Such companies also include Bajaj Corp, Essar Shipping, Essar Ports, Jaypee Infratech, Mahindra Holidays, Muthoot Finance, Adani Enterprises, Adani Ports, Oberoi Realty and JSW Energy.


Together, these companies would need to sell shares worth an estimated amount of more than Rs30,000 crore to meet the required shareholding norms.


However, SEBI is worried over the fact that only a few companies have taken steps in the recent past to meet the requirement, although the market conditions have improved.


Some of the firms that have met the requirement in recent months include Godrej Industries, Muthoot Capital and Adani Power, while subsidiaries of a few multi-national companies have also announced plans to meet the deadline.


Among still non-compliant companies, some have said they intend to meet the deadline but no plans of action have been provided in most of the cases.


Of the total, more than 50 companies currently have a public holding of 10% or below, making it difficult for them to meet the deadline, while around 30-40 companies would need to sell just one% or less shares to adhere to the guidelines.


The public sector companies have time till August 2013 to achieve a minimum public shareholding of 10%. Any action against the public sector companies would be discussed at a later stage as they have more time in hand and the minimum public shareholding limit is also lower in their case.


Also, the number of PSU companies with public shareholding of below 10% as of now is less than 20, although level of non-adherence is much larger as some of them have public holding of one% or below.


The SEBI has provided various options over the recent months to help the companies meet minimum public shareholding criteria, by permitting options of rights/bonus issuances of shares, as also new routes like Offer for Sale (OFS) and Institutional Placement Programme (IPP).


Besides, in exceptional situations, where any company has a special difficulty in following the prescribed methods because of reasons peculiar to it, SEBI Chairman is authorised to approve a specific solution on case-to-case basis.


The listed entities desirous of achieving the minimum public shareholding requirement through other means can approach SEBI with the appropriate details, while companies can also seek any relaxation within the available methods.


However, SEBI is not willing to extend the deadline any further, which was set way back in 2010, the official said.


SEBI is even willing to allow 'corporate restructuring' as a means of achieving minimum public shareholding, but the companies desirous of using this method are required to seek prior approval from the regulator, he added.



siddharth biswal

4 years ago

It is obvious from their action that they want to delay it till the deadline & bombard last month before deadline with 100s of NFO's so that market is unable to absorb so many papers which leads to very less dilution of their holding as they can plead helpless.SEBI should set a time frame for each co in a phased manner so that mkt gets time to absorb over several months.

Monthly complaints against telemarketing calls drops sharply

Total number of complaints lodged by telecom subscribers have come down to 17,425 complaints per month from 47,454 complaints per month a year ago

New Delhi: The average number of complaints against telemarketing calls has declined to 17,425 per month now from an average 47,454 monthly complaints a year ago since the regulations on curbing unsolicited commercial calls (UCC) came into effect, reports PTI.


"Prior to the coming into force of the regulations from 27 September 2011, on an average 47,454 complaints were received per month (averaged over the period March 2010 to March 2011)," Minister of State for Communications and IT Milind Deora said in a written reply to the Rajya Sabha.


The total number of complaints lodged by telecom subscribers with their service providers from 27 September 2011 to 25 July 2012 were only 1.74 lakh (17,425 complaints per month), he added.


Deora said as per the said framework, customers can register with National Customer Preference Register (NCPR) for not receiving UCC.


The Telecom Regulatory Authority of India (TRAI) has also issued a number of amendments to these regulations and directions to address implementation issues and to make the regulatory framework effective and stringent, he added.


"However, it is seen that a number of telemarketers have violated the regulatory framework for controlling UCC. From the complaints received by service providers, it is seen that the majority of complaints of UCC are those in which calls or SMS have been sent by telecom subscriber who is not registered as a telemarketer with TRAI," Deora said.


Deora added that while 1.5 lakh notices have been sent to subscribers who have not registered as a telemarketer but were doing the telemarketing activities, 1.4 lakh telephone numbers (telecom resources) of such subscribers have been disconnected.


He said Rs1.08 crore has been deducted from the security deposit of registered telemarketers in 195 cases and 13 telemarketers have been black listed.


Deora said the restriction of 200 SMS per day per SIM was struck down by Delhi High Court.


"After quashing the limit of 200 SMS per day per SIM by Delhi High Court, 1.5 lakh complaints have been lodged from 1 August 2012 to 30 October 2012 by consumers with their service providers (49,088 complaints per month)," he said.


TRAI moves to check arbitrary disconnection of SIMs

TRAI, in a consultation paper says that deactivation of a SIM without prior intimation and on arbitrary grounds deprives the subscriber of his mobile number which might have been an identity for him for a long time

New Delhi: The Telecom Regulatory Authority of India (TRAI) has initiated debate on the issue of operators arbitrarily disconnecting services of customers on the grounds of 'non-usage of numbers' or 'inactive SIM connections', reports PTI.


According to information provided by telecom operators to the TRAI, around 20 crore SIMs were inactive for over a certain period of time and the total balance on that account stood at Rs128.9 crore.


TRAI has said that telecom subscribers at various forums have represented that their mobile connections were being disconnected arbitrarily by telecom operators.


"Deactivation of a SIM without prior intimation and on arbitrary grounds deprives the subscriber of his mobile number which might have been an identity for him for a long time," said TRAI's consultation paper on the issue.


As a result, consumers suffer from a potential loss of activity in both personal and professional set-ups causing an adverse impact on livelihood.


"While some consumers complained against the practice of deactivation of SIMs without prior intimation to them by their TSPs (Telecom Service Providers) when they were travelling in India or abroad, other subscribers lamented about disconnection of their life-time prepaid connections within a very short period of non-usage," TRAI said.


Telecom operators in their meetings with TRAI have said that they have to deactivate SIMs to efficiently manage number series (mobile phone numbers) allocated to them by the Department of Telecom.


TRAI said it has found that telecom operators do not follow common criteria to disconnect inactive SIMs but added that "to manage their numbering resources better, the service providers have proposed to follow a procedure for deactivating mobile connections which are not used for a long time".


In July 2011, DoT started allocating number series to telecom operators on the basis of active users on their network.


"However, while carrying out such deactivations, the customers should be informed transparently and those customers who wish to retain their connections even while not using them should have the option to do so on payment of a connection retention fee," it added.


TRAI cited that its order on tariff plan with lifetime or unlimited validity "requires any subscriber to recharge" his mobile phone account "with any specified minimum amount within specified time periods" during validity of the plan.


" keep the said tariff plan valid, such specified time period or interval, shall, in no case, be less than six months," the regulator said.


TRAI has fixed 21st December as last date for comments on this consultation paper, and December 28 as last date for counter comments.


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