Sebi also said promoters, whole-time directors of delisted firms will not be eligible to become directors of any listed company until an exit option is provided. Photo: Aniruddha Chowdhury/MintMumbai: India’s capital markets regulator on Wednesday toughened penalties for delisted companies that do not provide exit options to shareholders, responding to complaints that executives were often not honouring listing agreements. To prevent recurrences, the Securities and Exchange Board of India (Sebi) said on Wednesday that companies that have been delisted will not be allowed to sell, pledge or transfer any equity shares until they have given an exit option to shareholders. Corporate benefits such as dividend, rights and bonus shares held by promoters will also be frozen until investors are given an opportunity to be paid back, Sebi said. The regulator also said promoters and whole-time directors of such companies will not be eligible to become directors of any listed company until an exit option is provided.

Source: Mint September 07, 2016 13:18 UTC