May ease rules to help debt resolution

The Securities Exchange Board of India (Sebi) may amend its rules to facilitate resolution of cases referred under the Insolvency & Bankruptcy Code (IBC).

Sources said the markets regulator may give concessions in takeover regulations and also delisting rules to these debt-ridden companies to help new players acquire the companies.

The Sebi board will meet on March 28 to discuss crucial amendments to disclosure norms for listed companies referred under the IBC.

The meeting would discuss the pros and cons of restricting trading in companies that are referred for resolution under the IBC.

Sebi is likely to seek public comment on whether or not restrictions be imposed on trading in the shares of such companies. The sources said Sebi may look at relaxing the 25 per cent minimum public shareholding norm, or allowing promoters to breach the 75 per cent stake via equity infusion to turn a company around. This would also mean the promoters will be given a leeway to achieve a minimum 25 per cent public holding in two years from one year now. Further, the regulator may also consider smoothening the delisting process of companies under the IBC purview. Towards this, procedures such as reverse book building may be relaxed. Sebi is already contemplating mandating higher disclosure prior to a debtor moving to the National Company Law Tribunal (NCLT).

It is believed that the regulator may order the debtor to disclose to stock exchanges the demand notice and invoice copy concerning loan default.