Monday, June 15, 2009

Finmin Comes Out With Mandatory Delisting Norms - June 15, 2009

The government on Friday gave a green signal to the bourses to deregister any firm that has incurred losses for the three consecutive years and has negative networth, subject to certain conditions. The finance ministry said in a notification that any recognised stock exchange can delist the securities if the securities trading remained suspended for more than six months.

However, the ministry also said that for delisting the securities, the company must have been listed for three years and the deregistering has to be approved by two-third public shareholders.

Moreover, the statement also added that if any companies’ scrips have remained infrequently traded during the preceding three years, then too the stock exchange can delist it.

Meanwhile SEBI on Thursday issued guidelines for voluntary delisting and made it tougher for the companies to delist their shares until they get the non-promoters’ approval at least two times the number of votes cast against it.

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