'Action against companies if 25% free float rule not met'

Companies that fail to meet the public shareholding deadline will have to face severe consequences, Sebi chairman U K Sinha warned on Friday.

“Sebi will be conscious of the fact that the interest of the minority shareholders in these companies are not being compromised. But I would like to remind, consequences of non-compliance of the listing agreement or any rule can be rather severe,” he said at a  FCCI capital market conference in Mumbai.

Sinha said even the finance ministry is on board with it for not extending next year’s deadline for achieving the 25 per cent public shareholding requirement. Sinha said the government,  has assured it that public sector undertakings (PSU) will be compliant with the free float requirement before the deadline.

All listed companies are required to have at least 25 per cent public holding by June 2013, while PSUs will have to meet the norm by August 2013.