Business Today
PTI feed
Story

Sebi provides exemptions for delisting of REIL Electricals

twitter-logo PTI        Last Updated: February 4, 2019  | 21:02 IST

New Delhi, Feb 4 (PTI) Sebi Monday granted certain exemptions to REIL Electricals for delisting its shares, citing various reasons, including the company's poor financial condition. The ruling has come on a plea made by the company in March 2018 seeking exemptions from certain regulatory requirements for delisting. Under voluntary delisting rules, the post offer promoter shareholding must be a minimum of 90 per cent and at least 25 per cent of the public shareholders should be tendering their shares in demat form. Currently, 98.19 per cent shares of REIL are with its promoters and the rest is with public shareholders. Sebi has granted relaxation to the company from the applicability of certain delisting regulations subject to fulfilling various conditions. In an order, the watchdog noted that it may not be practicable to insist the company on strict compliance with 25 per cent Minimum Public Shareholding (MPS)norms for delisting the shares. The breach of the limits on promoter shareholding did not take place after implementation of MPS norms. In fact, the alleged non-compliance was a pre-existing one and therefore not a wanton subsequent breach, it added. "The poor financial condition of the company and the inadequate potential for its revival would mean that investors are unlikely to evince interest in acquiring shares of the company. Consequently, it would be very difficult or almost impossible for the company to increase its public shareholding to be in compliance with MPS norms," Sebi noted. Further, the process of voluntary delisting is hampered by the fact that public shareholders are, admittedly, not traceable, the regulator said, adding that the company's efforts to trace them are noted to be quite consistent. According to Sebi, the delisting offer can proceed if at least 25 per cent of the public shareholders holding shares in the demat mode, as on the date of this order, consent to sell their equity shares at the price offered by the promoters. "I am of the view that there is no useful purpose either for the shareholders or for the company or the investors at large, for this company to remain listed," Sebi Whole Time Member G Mahalingam said in the order. PTI SRS SP MR RAM RAM

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close