Chennai, Jan 18 (IANS) India's market regulator SEBI has rejected around 150 consent settlement applications but is not reopening settled consent order cases to penalise company promoters, its chief said Friday.
Securities and Exchange Board of India (SEBI) chairman U.K. Sinha said the government-owned companies will comply with the minimum public shareholding norms and "consequences" will follow for those who do not comply.
Queried whether SEBI is reopening closed consent cases, Sinha said: "SEBI is the only regulator to have said what can be consented and what cannot be consented. SEBI has rejected 149 consent applications. If we find evidence, we will take action."
However he declined to comment on the case of Arun Jain, chairman and managing director of Polaris Technology Ltd who was barred for two years from the securities market last year after a consent settlement in 2008.
The market regulator also declined to comment on decision to reject Reliance Industries Ltd's plea for consent settlement in an alleged violation of insider trading norms.
A consent settlement is where a person agrees to pay certain charges and undue gains without admission of guilt.
Sinha said companies that do not comply with its regulation of having minimum public shareholding of 25 percent will have to face consequences.
The deadline for companies to have a minimum public shareholding is June 2013.
"We have received a letter from the government that it is keen to complete formalities relating to minimum shareholdings with public sector undertakings," Sinha said.
The minimum public shareholding for government companies is stipulated at 10 percent.
According to Sinha, the SEBI will hold wider discussions on its proposal to have a `safety net' for retail investors when the market prices of shares fall down by more than 20 percent after initial listing.
"There are divergent views on the issue and hence we need more discussion," Sinha said.
As per SEBI's proposal companies may be compelled to refund money to retail investors if the prices of shares fall down by more than 20 percent of initial public offer (IPO) price.