SEBI to penalise firms that failed to meet MPS norms: Srcs

Securities and Exchanges Board of India is likely to come up with a penal action against listed companies that failed to meet regulator’s deadline for achieving minimum 25 percent public shareholding, reports Sajeet Manghat of CNBC-TV18 quoting sources.

Around 122 listed companies from private sector have failed to meet the market regulator's, which ended today for achieving minimum 25 per cent public shareholding.
The penal action may include freezing of voting rights of the promoters, freezing of corporate benefits of the promoters, moving the scrip to trade to trade (T2T), excluding the scrip from future and options (F&O) and also prohibiting promoter and promoter group companies from accessing capital markets.
Around 40 companies on the National Stock Exchange (NSE) and nearly 82 companies on the Bombay Stock Exchange (BSE) are yet to meet the minimum public shareholding (MPS) guidelines.
Lot of these companies are likely to come out with the statement that they have complied with MSP guidelines in certain manner.
At the end of December 2012 nearly 178 companies were yet to meet the MPS guidelines. Nearly 100 companies came into the market after that and promoters raising nearly Rs 20000 crore odd from the market to meet the MPS guidelines.
There are not many big companies which are there in the list of 40 and 82. Most of these companies are small cap companies who haven’t met the MPS guidelines. Thus, more or less deadline is achieved by many of the top companies which Sebi was looking forward to.