Dividend information to SEs in 15 minutes

MUMBAI, NOV. 28. In a bid to prevent manipulation of stock prices, the Securities and Exchange Board of India (SEBI) has made it mandatory for listed companies to report decisions about dividends and bonus within 15 minutes of the board meeting to the stock markets.

``Listed companies will have to disclose material developments such as bonus and dividend decisions taken by the board of directors in 15 minutes after its meeting, irrespective of trading hours", the newly appointed chairman of SEBI's secondary market committee, Mr. S. S. Tarapore, told newsmen after a meeting here today. At present, companies have to report such event to bourses 30 minutes before and after trading hours.

The SEBI chairman, Mr. D. R. Mehta, said a circular to this effect would be issued in a day or two. The committee also decided to do away with the concept of `no-delivery period' for companies whose shares are dematerialised, he said.

Trading in shares would not be closed after bonus and dividend decisions and this step would help to contain manipulation in scrip prices, Mr. Mehta said.

``We want to extend this for the rights issue also and a decision will be taken after considering legal implications", he said adding a decision about timing on reporting developments such as mergers and acquisition would be taken after discussing issue with business chambers.The committee has recommended to reduce the time gap between two book closures from current 90 days to 30 days, Mr. Tarapore said.

On the issue of low floating stock of listed companies, Mr. Tarapore, former deputy governor of Reserve Bank of India, said ``In many cases shares available for trading (non-promoter holding) has reduced below stipulated level, after they issued preference shares". The companies have to maintain a floating stock of 10 or 25 per cent according to the rules of bourses prevailing at the time of listing, he said.

Mr. Tarapore has recommended that such companies should either issue shares to take floating stock at 10-25 per cent level or else have an option to buy the floating stock and delist the company from the exchanges".

Mr. Mehta said existing companies with floating stock below requirement would be given one year time to raise it to minimum level by offering shares to public. ``Those with other plans have option to delist companies by purchasing the floating stock, he added.

- PTI

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