Minimum Public Shareholding Norms (MPS)

 

Securities and Exchange Board of India (SEBI), had mandated that by June 3, 2013, companies, where promoters held over 75 % should dilute their stake to keep the minimum public shareholding at 25 %

From March 1, 2012, to May 31, 2013, nearly 50 corporates used the ''offer for sale'' (OFS) route, nine went through ''Institutional Placement Programme'' (IPP) option and a few used the Bonus Issue route to reduce their holdings.

However, some companies got extension of time through appeals with SEBI or by moving the Securities Appellate Tribunal (SAT)

There are 12 public sector enterprises which have 90 per cent government holdings. These companies are required to offload shares to comply with SEBI’s guidelines by August 2013

SEBI acts against defaulting cos.

SEBI said that 105 listed companies failed to comply with the minimum public shareholding of 25 per cent in those companies within the stipulated time period of June 3, 2013
SEBI also directed these companies to freeze the voting rights of their directors and promoters, and stop their corporate benefits such as dividend, rights, bonus shares and split with respect to the excess of proportionate promoter shareholding.

Further, the regulator restrained the shareholders forming part of the promoter group in the non-complaint companies from holding any new position as a director any listed company.

SEBI has asked these companies to file their relay within 21 days from the date of this order, i.e., June 4.