Instead of mandating MPS norms, SEBI should look at why promoters don’t like going to market
theprint.in/opinion/instead-of-mandating-mps-norms-sebi-should-look-at-why-promoters-dont-like-going-to-market/1614457/
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One of the allegations in the Hindenburg report was that Adani Group companies were violating the minimum public shareholding (MPS) norms laid down by SEBI. The MPS norms require that a listed company in India should have at least 25 per cent of its shares held by the public. The Hindenburg report suggested that the group was investing in overseas funds, creating layers of such funds, and subsequently having foreign portfolio investors (FPIs) invest the funds back into the company. The ultimate owner, after combing through such multiple layers of ownership, therefore, was the Adani family, thus violating the 25 per cent MPS rule. FPIs are required to disclose certain specific information about their ultimate beneficial owners. When the Supreme Court set up a committee to look into the matter, one of its mandates was to assess whether SEBI had failed in regulating FPIs. The committee’s report suggests that SEBI had not slipped on this count.
FPI disclosures have been limited to the definition of beneficial owner set under the Prevention of Money Laundering Act (PMLA). S
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