SEBI Withdraws Controversial Statement
Nearly two weeks after causing a stir with its press statement attributing employee unrest to “external elements,” the Securities and Exchange Board of India (SEBI) has retracted its controversial remarks. According to the first statement, SEBI staff members were being deceived by external parties in an effort to damage the organization’s reputation. This declaration was made in response to an internal letter from SEBI employees that demanded that SEBI Chairperson Madhabi Puri Buch quit and attacked the work environment.
On Monday, SEBI clarified that the issues raised by employees are strictly internal and have been reaffirmed through discussions with staff across all levels. The regulator emphasized that all concerns will be managed through established internal channels rather than public forums. SEBI’s updated statement indicated that the previous press release from September 4, 2024, which suggested that external influences were at play, has been withdrawn.
Revised Procedures for Bonus Share Trading
In a separate but significant update, SEBI has announced a reduction in the time frame for the trading and transfer of bonus shares. This change aims to streamline the process and improve efficiency for investors.
Here’s a summary of the new procedures:
- Application for Approval: Companies proposing a bonus issue must apply for in-principle approval from the stock exchange within five working days of the board meeting that approves the bonus issue.
- Record Date and Allotment: When fixing the record date (T day) for the bonus issue, issuers must also record the deemed date of allotment (T+1 day).
- Stock Exchange Notification: Once the record date and necessary documents are received, the stock exchange will notify the acceptance of the record date and the number of shares involved. This notification will include the deemed date of allotment.
- Document Submission: In order to credit the bonus shares, issuers must deliver the necessary paperwork to depositories by 12 PM on the working day after the record date.(T+1 day).
- Distinctive Numbers: Issuers are required to upload the distinctive number (DN) ranges into the DN database of the depository. Stock exchanges will update the relevant dates before the bonus shares are credited.
- Trading Availability: Bonus shares will be available for trading on the next working day following the allotment (T+2 day).
- Permanent ISIN: For bonus issues of equity shares, crediting directly into the permanent ISIN will be permitted, bypassing previous requirements for a temporary ISIN.
Adani Wilmar’s Upcoming Stake Sale
In related financial news, Adani Enterprises and Wilmar International are planning to divest a minority stake in their consumer joint venture, Adani Wilmar. This move comes in response to regulations that require a minimum of 25% of shares to be held by non-founders within three years of listing.
The companies aim to sell approximately 13% of their stake, valued around $736 million, to comply with Indian securities laws. This sale is expected to take place in one or two phases by February 2025. The shareholding adjustment is part of Adani Wilmar’s effort to align with market regulations and maintain investor confidence.
Adani Wilmar’s stock has recently shown positive movement, closing 2.1% higher on the news. The sale will provide a gauge of investor interest in the company, which has recently returned to profitability.
SEBI’s retraction of its earlier statement and the new procedures for bonus share trading reflect a commitment to addressing internal issues and improving operational efficiency. Meanwhile, Adani Wilmar’s planned stake sale highlights the company’s efforts to comply with regulatory requirements and adapt to market conditions. Both developments are significant for investors and stakeholders in the Indian financial landscape.
Read More: Congress and Hindenburg Target SEBI Chairperson: Madhabi Puri Buch’s Silence Under Fire
