Sebi grants more time to RMG Alloy to comply with norms

Market regulator Sebi has modified its interim direction issued to RMG Alloy Steel Ltd and granted more time to the company to adhere with minimum 25 per cent public shareholding norms.
The Securities and Exchange Board of India (Sebi) has asked RMG Alloy to meet the minimum public shareholding requirements by February 6, 2016, failing which the curbs would be "immediately revived".
As per the norms, all listed private sector companies were required to have a minimum of 25 per cent public holding by June 3.
On June 4, the regulator had imposed curbs on the non- compliant firms including RMG Alloy but revoked these restrictions through an order passed on October 14, last year.

Besides, Sebi had asked the company to comply with minimum 25 per cent public shareholding norms by February 6, 2014.
"...Hereby modify the Sebi order dated October 14, 2013 to the extent that the directions issued vide the Sebi order dated June 4, 2013 3, shall immediately be revived against the company, its directors, promoters and the promoter group, if the promoter shareholding in RMG Alloy is not reduced to 75 per cent or less within February 6, 2016...," regulator said in a order yesterday.

The extension of deadline is based on a order by Board for Industrial and Financial Reconstruction (BIFR) according to which RMG Alloy was granted more time (till February 6, 2014) for diluting promoters' stake in the sick company to at least 75 per cent.

Earlier, BIFR had given a five year time limit (from February 7, 2009 to February 6, 2014) to offload the company's shares to bring the promoter shareholding down to 75 per cent.
RMG Alloy was declared a "sick" industrial unit in August 1999 by BIFR after which it approved a scheme for the firm's rehabilitation on October 18, 2002.
In its June 4 order, Sebi had frozen the voting rights and corporate benefits of promoters/directors of 105 non- compliant firms and barred them from holding any new position on boards of listed firms, among others.
Further, the regulator had warned the firms of further actions, including levy of monetary penalties, initiation of criminal proceedings, restricting the trading activities of related stocks and other possible directions.