Skip to main content

MPS norms Non compliant companies to face stiff penalties

MPS norms Non compliant companies to face stiff penalties
Stock exchanges will impose a fine of up to Rs 10,000 on companies for each day of non- compliance with the minimum public shareholding requirements, according to a Sebi circular.Names of the non-compliant entities would also be disclosed on the websites of the exchanges concerned.Under the Sebi norms, listed entities are required to have a Minimum Public Shareholding (MPS) of 25 per cent.
Listing out the procedures to be followed by stock exchanges, Sebi in a circular today said that in case they find companies are not in compliance with MPS requirements, then notices should be issued to them within 15 days.In cases where the listed entity has failed to meet the MPS norms for more than a year, the bourse would slap a fine of "Rs 10,000 per day of non-compliance" and the penalty would continue to be imposed till the date of compliance.
For other non-compliant entities, the fine would be Rs 5,000 per day."The amount of fine realised... shall be credited to the 'Investor Protection Fund' of the concerned recognised stock exchange," the circular said.Besides, the stock exchange would intimate depositories to freeze the entire shareholding of the promoter and promoter group in those non-compliant entities till the date of compliance.
"The promoters, promoter group and directors of the listed entity shall not hold any new position as director in any other listed entity till the date of compliance by such entity."An intimation to this effect shall be provided to the listed entity by the recognised stock exchange and the listed entity shall subsequently intimate the same to its promoters, promoter group and directors," the circular said.
A part from penalty, the exchanges can also consider compulsory delisting of the non-compliant entity.Periodically, the bourse would disclose on their website "names of non-compliant entities, amount of fine imposed, freezing of shares held by the promoters and promoter group and other actions taken against the entity".
Status of compliance, including details regarding fine paid by the entity, would also be disclosed, as per the circular.Issuing the circular, Sebi said it is to maintain consistency and uniformity of approach in the enforcement of MPS norms and the procedures have to be followed by the recognised stock exchanges as well as depositories. RAM MKJ
The Times of India, New Delhi, 11th October 2017

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Firms with sales below Rs.50 crore out of ambit

The tax department has reiterated that the PoEM rules, which require foreign firms to pay taxes in India if the effective control is here, will not apply to companies withaturnover of Rs.50 crore or less inafinancial year. Last month, the tax department had come out with the longawaited Place of Effective Management (PoEM) rules, which require foreign companies in India and Indian firms with overseas subsidiaries to pay local taxes if their businesses are effectively controlled by Indians. Then the rules did not setathreshold above which they were to apply. However, the accompanying press release states that the rules will not apply to companies withaturnover of up to Rs.50 crore inayear. That created confusion whether the threshold will be adhered to. Inacircular to clarify things, the Central Board of Direct Taxes (CBDT) said the provision "shall not apply toacompany havingaturnover or gross receipts of ~50 crore or less inafinancial year".

PoEM rules essentially target shell …