Today's Economic Times editorial supports
my views in day before's ET column on dismantling the rigid regime permitting limited routes for dilution by promoters to have a minimum 25% public float. As a comment on the online ET piece points out correctly, a point I missed making - there is another whammy for sale by promoters through these rigid methods - they face an adverse tax regime (on exchange sales would likely be exempt from capital gains tax).
Prof. Jayanth Varma has an important post on credit rating agencies:
Structured by cows or by foxes?
SEBI thankfully comes out and
relaxes IDR fungibility norms which had destroyed the single security market with pointless control. See
my previous post Indian Vaporised Receipts and FT.com piece on IDRs.
1 comment:
Maybe two more points on this. One, if SEBI's concern is that the promoters may `park' their holding, then allowing secondary market sale is the most transparent way, as any attempt to enter into synchronized trading(for parking) can be better detected by the market surveillance system. Two, if a promoter holding say 84% stake sells 8.90% stake in the secondary market, would it be treated as a violation of SEBI dictate? If so, this means that no non-complying promoter would be able to sell even a single share other that thru one of the stipulated methods, till the time the min. public float is achieved. As things stand, in my view, SEBI's prescription is operationally incoherent.
-Mangesh Patwardhan
Post a Comment