Mumbai: Capital markets watchdog Sebi will initiate adjudication proceedings against Plethico Pharmaceuticals for failing to meet the minimum public shareholding norms within the stipulated time period.
At the same time, Sebi has revoked the curbs it had imposed on Plethico as well as its promoters and directors for not achieving the 25 percent minimum public holding as the firm has been able to achieve compliance.
However, Sebi noted that the compliance was met only at the end of March 2014 as against the deadline of June 3, 2013.
"Such delay by the company in complying with the minimum public shareholding norms is not acceptable," Sebi whole time member Prashant Saran said in an order dated September 3.
"In view of the same, I am of the considered view that the case be referred for adjudication proceedings for adjudicating the company under...The Securities Contracts (Regulation) Rules," Saran added.
The regulator said that an "adjudicating officer shall be appointed by Sebi...And such adjudicating officer shall conduct the inquiry in accordance with law".
According, to the Securities and Exchange Board of India (Sebi) Plethico "did not take concrete steps for achieving compliance with minimum public shareholding requirements and that compliance has been achieved by invocation of pledge of promoters' shares by financial institutions".
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, Plethico Pharmaceuticals Ltd, its directors including Hitesh Thakar,the 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 Plethico, 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.
As per the shareholding pattern of the company for the quarter-ended March, 2014, the promoters' holding stands reduced to 73.68 percent and public shareholders were shown as holding 26.32 percent.
