Sebi to initate adjudication proceedings against Parshwanath Corporation

Mumbai: Capital markets regulator Securities and Exchange Board of India (Sebi) will initiate adjudication proceedings against Parshwanath Corporation Ltd for irregularities in complying with 25% minimum public shareholding norms.

While revoking the curbs it had imposed on Parshwanath as well as its promoters and directors for not achieving the 25% minimum public holding, Sebi said the firm had adopted “an unapproved method” to meet the norms.

Besides, the regulator also noted that the company had achieved minimum public shareholding requirement only by the quarter ended 30 September 2014 as against the deadline of 3 June 2013.

“Such delay by the Company in complying with the MPS norms is not acceptable,” Sebi said in an order on Wednesday.

Accordingly, referring the matter for adjududication proceedings, Sebi said, “for this purpose, an adjudicating officer shall be appointed...” At the same time Sebi said that as the company has now acheived compliance it was “appropriate and reasonable to vacate the directions issued vide the interim order against the company, its promoters and directors”.

“...hereby revoke the directions issued vide the interim order dated June 4, 2013 against the company, Parshwanath Corporation Ltd, its directors, promoters and promoter group, with immediate effect,” the market regulator said.

In the interim order, Sebi had slapped various curbs on over 100 non-compliant firms including Parshwanath , their promoters and directors for not meeting the norms. It had frozen the voting rights and corporate benefits of promoters/directors of these companies and barred them from holding new position on boards of listed firms, among others.

Sebi noted that the company “initially had adopted an unapproved method and had started taking effective steps for compliance only from May 2013”.

“If it had taken those steps much earlier, it could have avoided the delay in complying with the Minimum Public Shareholding,” Sebi said.