Mumbai: Capital market regulator Sebi today said that both public and private sector companies will have to increase public shareholding to a minimum of 25 percent by August 2013 and there will be no relaxation of the guidelines.
“Companies will have to see that public shareholding is 25 percent as per the time-frame. As far as private listed companies are concerned, it is June 2013 and for the public sector firms it is August 2013,” Sebi Chairman U K Sinha told reporters on the sidelines of a BSE function. Some companies, he said, “feel that Sebi will relax this. But let me tell you I am going to make it difficult.”
There are 181 non-PSU firms that do not meet the minimum shareholding norms, he said, adding “around Rs 27,000 crore will have to be mobilised by June 2013. Sixteen PSUs will have to mobilise Rs 12,000 crore.” On the revamping of Initial Public Offering (IPO) process, Sinha said, “entire process will be done in three-four months.”
The regulator, he further said, will come out with the guidelines on MIMPS (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) in the next two months. Sinha, however, refused to comment on the controversy relating to General Anti Avoidance Rules (GAAR), which were proposed in the Budget to tighten laws to check tax evasion and had adversely impacted the stock markets.
“That (GAAR) is between government and affected parties (FIIs). Sebi has no direct role on it, so I will not be able to comment on this,” Sinha said.
On revising of consent order norms, the Securities and Exchange Board of India (Sebi) chief said, “New consent order guidelines will be out in the next four weeks.”
The consent order regulations allow defaulting parties to settle disputes with Sebi on payment of an agreed fine. The mechanism has evoked criticism from several quarters.
Stating that the market regulator was not opposing high frequency trading (also called algorithmic trading), Sinha stressed, “We will have to ensure that risk part is well understood and enforced. And stock exchanges will have to take it seriously”.