Companies need not require nod of shareholders for re-classification of promoter group members to public category subject to certain conditions, according to SEBI.
Giving its views on an application filed by Krebs Biochemicals & Industries Ltd, the watchdog also made it clear that such re-classification may be allowed by the stock exchanges under listing norms subject to certain compliances.
Krebs Biochemicals had sought an informal guidance from SEBI on whether shareholders’ approval would be required to re-classification of promoter group members to public category.
“Our view is that the company may not be required to obtain approval of the shareholders for the proposed re-classification,” SEBI said, adding that its response is based on the information given in the company’s letter.
“Different facts or conditions might lead to a different result. Further, this letter does not express a decision of the Board on the questions referred,” the regulator said.
Among others, the company in its letter had submitted that the promoters who want to be re-categorised are “not holding any share in the company and are not holding any control over the affairs and management of the company”.
The watchdog also said that its views are expressed with respect to clarification sought in terms of Sebi (Listing obligations and Disclosure requirements) and is not applicable for any other Sebi regulations.