|
| Delist cos making loss for 3 yrs: Finmin to bourses |
| Press Trust Of India / New Delhi Jun 14, 2009, 00:23 IST |
|
Scrips not traded for 6 months also to be delisted.
 To facilitate the process of stock exchanges delisting illiquid scrips, the government on Friday allowed the bourses to deregister any firm that has incurred losses for three consecutive years and has negative net worth, subject to certain conditions.
Coming out with norms for mandatory delisting of securities, the finance ministry said in a notification that any recognised stock exchange could delist stocks if trading in them remained suspended for more than six months.
“This will essentially help stock exchanges clean up some non-performing companies so that they can provide better service to the performing ones. This will help in using the resources more effectively,” Jagannadham Thunuguntla, equity head of SMC Capital, said.
However, for delisting, the company must have been listed for three years and the deregistering has to be approved by two-thirds of public shareholders, the ministry said.
Also, the statement added, if the scrips of any company have remained infrequently traded during the preceding three years, the same could be delisted.
On Thursday, the Securities and Exchange Board of India (Sebi) issued guidelines for voluntary delisting and made it tougher for companies to delist their shares until they get the approval of non-promoters.
If the public shareholding of any company has come down below a minimum level as per the listing agreement and the company fails to raise it to the required level within a stipulated time, the securities can be delisted.
The ministry said that in case of mandatory delisting, the company, promoter and director of the company would jointly buy the outstanding securities from shareholders who wanted to sell them at a fair price.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
