| Long haul ahead for listed firms | ||
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New Delhi, 15 August A fourth of the country's listed companies have not disclosed their shareholding details to the exchanges, breaching a key disclosure norm set by the regulator. The Securities and Exchange Board of India (Sebi) says as many as 1,259 companies (25.3 per cent) of the 4,977 listed on the bourses had not disclosed their shareholding pattern as of March. It is possible that a significant number of these are not compliant with the minimum public shareholding norms, say analysts. Of the remaining ones, as many as 193 also aren't compliant with these norms, the data showed. According to Sebi rules, at least 25 per cent of private sector companies and 10 per cent of public sector ones should be held by public shareholders. In 2010, the government had given three years for companies to comply with these rules. The total amount to be raised by companies to meet the requirement is estimated at ~32,000 crore — about ~11,000 crore by public sector companies and rest by private ones. While the latter have to meet the norms by June 2013, the deadline for public sector units is August 2013. While companies are keen on getting the deadline extended, citing unfavourable market conditions, Sebi is not keen. "Is it our case that between 2001 when the rule was introduced till now, in these 11 years, there was never a good period?" asked Sebi Chairman U K Sinha in a recent seminar. He said about 30 companies had public shareholding of less than 10 per cent. In another 95, public shareholders own between 10 and 20 per cent. "We have a big problem here," Sinha added. He was however, open to increasing the avenues available for such divestment. In a recent report, investment bank Morgan Stanley has outlined block trades, Employee Stock Option Plan conversion, American Depository Receipts and Global Depository Receipts, rights issues without promoter participation, preferential allotment and convertible securities as routes which could be considered for this purpose. Meanwhile, the Sebi board is scheduled to meet tomorrow and consider changes in mutual fund and IPO norms. PUBLIC SHAREHOLDING RULES Regulator could consider additional avenues for promoter stake dilution | ||
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GoM mulls bringing non-govt agencies under corruption law | ||
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New Delhi, 15 August A Group of Ministers (GoM) set up to tackle corruption has discussed substantial changes in the current rules. Key changes include bringing private sector providers of utility services and non-government agencies under the Prevention of Corruption Act, a separate mechanism for the allocation of the scarce natural resource of land for educational purposes, a regulatory body for the housing sector and the creation of a single platform (for trading) for coal transactions. In its eighth meeting held a few weeks ago, the GoM, however, rejected a proposal by an expert committee to extend the protection a government servant enjoys in a government department under the Code of Criminal Procedure when he joins a public sector undertaking on deputation, saying it would be discriminatory against regular PSU employees. The GoM, now headed by Defence Minister A K Anthony, includes Finance Minister P Chidambaram, Corporate Affairs Minister Veerappa Moily, Home Minister Sushilkumar Shinde, Communications Minister Kapil Sibal and others. The legislative department in the ministry of law and justice also suggested substantial for the funding of political parties for elections to prevent the use of black money. The department has suggested an increase in the limit, as prescribed under the Companies Act, by allowing companies to make political donations not exceeding five per cent of their average net profit of the previous three years to 7.5 per cent. It has also suggested an enhancement in the ceiling on expenditure by candidates in elections by at least 50 per cent. It has said the accounts of political parties should be audited by the CAG or RBI-empanelled auditors. Also, the accounting of all donations from the public must be made by using the unique ID of every person and all donations accepted only by cheque and received in a single separate bank account, it has said. Apart from partial funding of elections by the government, it has opined women candidates should be fully funded. After discussions, the GoM decided the issues on funding had to be examined in consultation with the Election Commission. The law ministry has been asked to discuss the matter with the election commissioners. The GoM also discussed a proposal to fast-track corruption cases against public servants pending for over 10 years by setting up a committee under a retired judge of the Supreme Court. |
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Company Secretary, Chennai
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