RBI Directs HDFC To Reduce Stake in HDFC Ergo, HDFC Life to 50% or Below
The Reserve Bank of India (RBI) has directed HDFC Limited to bring down its stake in its subsidiaries HDFC Ergo and HDFC Life Insurance to 50% or below.
 
The RBI has directed that post-merger of HDFC Ergo Health Insurance Company Limited (formerly Apollo Munich Health Insurance Company) with HDFC Ergo General Insurance Company, subsidiaries of the Corporation, the stake of the corporation in the merged entity should be brought down to 50% or below within a period of six months from the merger.
 
HDFC said in a regulatory filing that it currently holds 51.15% in HDFC Ergo Health and 50.48% in HDFC Ergo, and based on the share exchange ratio, the Corporation is entitled to 50.58% stake in the merged entity, HDFC Ergo.
 
The merging entities have filed necessary petitions with National Company Law Tribunal (NCLT) , Mumbai and are awaiting approval of NCLT.
 
The RBI has also directed HDFC Limited to bring down its stake in HDFC Life Insurance Company, subsidiary of the Corporation, to 50% or below, from its existing shareholding of 51.43%, on or before 16 December 2020.
 
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    SEBI relaxes minimum public shareholding norms till August
    The Securities and Exchange Board of India (SEBI) on Thursday relaxed the 25 per cent minimum public shareholding norm and advised exchanges not to take penal action, till August 2020, against companies in case of non-compliance.
     
    In a circular on Thursday, the security market regulator said that it took the decision after considering requests from listed companies and industry bodies along with considering the current market and business conditions.
     
    "Accordingly, the stipulations of the aforesaid October 10, 2017 SEBI circular are relaxed for listed entities for whom the deadline to comply with MPS requirements falls between the period from March 1, 2020 to August 31, 2020...," it said.
     
    It further said that any penal actions have been initiated by stock exchanges from March 1, 2020 for non-compliance of the minimum public shareholding requirements by such listed entities may be withdrawn.
     
    The circular comes into force with immediate effect, it said. SEBI asked stock exchanges to bring the provisions of this circular to the notice of all listed entities that have issued specified securities and also disseminate it on their websites.
     
    As per SEBI norms, listed entities are required to have at least 25 per cent public shareholding and its circular dated October 10, 2017 laid down the procedure to be followed by stock exchanges with respect to non-compliant companies, their promoters and directors.
     
    As per the norms, the recognised stock exchange shall impose a fine of Rs 5,000 per day of non-compliance on the listed entity and such fine shall continue to be imposed till the date of compliance by such listed entity. Among other actions, the exchange would also intimate the depositories to freeze the entire shareholding of the promoter and promoter group in such listed entity till the date of compliance by such entity.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
     
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    4 months ago

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    MCA's relief on delivery of notice to shareholders for rights issue
    In another relief over regulatory compliance for listed companies, the Ministry of Corporate Affairs (MCA) has said that if a company is not able to deliver a notice with the details of a proposed rights issue, opening up to July 31, to the shareholders, it will not be considered as a violation of norms.
     
    In a circular, the ministry on Monday said that it has received several representations for providing clarification on the mode of issue of notice referred to in section 62(1)a(i) of Companies Act read with Section 62(2) of the Act for rights issue of listed companies, in view of the difficulties faced by companies in sending notices through post or courier services on account of the threat posed by Covid-19.
     
    "In view of the above and on account of the overall situation, it is hereby clarified that for rights issues opening upto 31st July 2020, in case of listed companies, which comply with the SEBI circular date 6th May 2020, inability to dispatch the notice to the shareholders through registered post or speed post or courier would not be viewed as a violation of section 62(2) of the Act," it said.
     
    As per the regulation, the offer shall be made by notice specifying the number of shares offered and limiting a time not being less than 15 days and not exceeding 30 days from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined.
     
    It should he be dispatched through registered post or speed post or through electronic mode or courier or any other mode having proof of delivery to all the existing shareholders at least three days before the opening of the issue.
     
    This is just another regulatory relief companies have been provided in view of the coronavirus pandemic.
     
    MCA's latest move is in line with security market regulator SEBI's relaxation announced on Wednesday to companies from compliance with procedural norms pertaining to rights issues opening up to July 31 amid the coronavirus lockdown.
     
    It said that the abridged letter of offer, application form and other issues material to shareholders can be undertaken by electronic transmission as already provided under the ICDR (Issue of Capital and Disclosure Requirements) norms.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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