SEBI examining free float and minimum public shareholding in companies – Here is what Chairman Ajay Tyagi said
“What we are examining is separately that what is minimum public shareholding and what is the actual float, that we are examining separately with exchanges, all of this as a concept level ,25% MPS whether does it mean 25% free float or not that we are examining” SEBI Chairman was speaking at the a18th Capital Market Conference of FICCI
SEBI Chairman Ajay Tyagi said that market regulator and exchanges are examining that whether free float are same as minimum public shareholding. The questions were raised in recent past about public holding of a large conglomerate. Though SEBI chief declined to speak about the investigation against any specific company but on the question of any proposal to change the minimum public shareholding norm Tyagi said “ What we are examining is separately that what is minimum public shareholding and what is the actual float, that we are examining separately with exchanges, all of this as a concept level, 25% MPS whether does it mean 25% free float or not that we are examining” SEBI Chairman was speaking at the 18th Capital Market Conference of FICCI.
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SEBI Chief also raised the issue of lack of seriousness on disclosures by many companies. He emphasized that periodic disclosures and disclosures of material events where certain events have been deemed as material and must be disclosed & the others to be disclosed if considered by the company and its board to be material. On both these aspects Tyagi said disclosures by many companies are lacking and appear more like a check-box exercise and is not acceptable. SEBI Chief said “This is not acceptable. Documents as important as the financial results, annual reports, corporate governance reports and others need the level of quality the investors deserve”.
He further added that often companies do not go beyond the deemed material events specified by SEBI Regulations to disclose material events and companies reply only when reported by media and than replies are sought by exchanges. Tyagi said “ This is surely not the right way to go”. He urged the companies, management and the boards to actively revisit their materiality policies and see that disclosures of material events are being met not just in letter but in spirit as well.
SEBI Chairman also asked representatives of institutional shareholders on the boards along with the independent directors in support of strong governance in the companies. He also spoke about Revisiting the concept of promoter ,deliberation on the framework of SPAC, reforms related to IPO process etc.
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