Lok Sabha Question No. 2241 (UNSTARRED), answered on 2016-05-06
Subject: Pledging of Shares
Ministry: FINANCE
Asked by: SUDHEER GUPTA, BIDYUT BARAN MAHATO, ASHOK SHANKARRAO CHAVAN, SUNIL BALIRAM GAIKWAD, JAYAKUMAR JAYAVARDHAN

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS FINANCIAL MARKETS DIVISION

## LOK SABIIA T.TNSTARRED  QTjESTTON NO. 2241 To BE ANSWERED oN FRTDAY,6"H MAY,2016l  VAISAKHA  16, 1938 (Saka)

## PLEDGING OF SHARES

## 2241. SHRI SUDHEER  GUPTA:

SIIRI BIDYUT BARAN MAHATO: SHRI ASIIOK SIIANKARRAO CHAVAN: DR. SUNIL BALIRAM GATKWAD: DR. J. JAYAVARDHAN:

Will the Minister of FINANCE be pleased  to state:

- (a)  whether many company promcters have ptedged most of their shares  and still remain as company promoters,  if so, the details  in this regard and the action taken/  being taken thereon  during the last three yeais;
- (b) whether the Government has fixed any criteria for the promoters  in this regard,  if so, the details thereof and ifnot, the reasons therefor; and
- (c) the steps  taken/being  taken by the Government  for benefit of small investors  of the companies?

## ANSWER MIN1STER  OF STATE IN THE MINISTRY OF FINANCE (SHRI JAYANT SINHA)

- (a): The Securities  and Exchange Board  of India (SBBD has informed  that listed companies/  promoter(s)  of listed companies  are rnandated to disclose  the details  of the pleclged shares to the stock ixchangis under  SEBI (Substantial  Acquisition  of Shares and Takeovers)  Regulations,  201I and SEBI (Listing Obligations  and Disclosure  Requirements)  Regulations, 2015.

According  to information available  as on 30il' April 2016, the data related to pledging  of shares in the companies listed on the nationwide  stock exchanges is as follows:-

| Name of the Stock Exchange                  |   Number of Listed Companies |   Number of Listed Companies in which promoters have oledsed shares |
|---------------------------------------------|------------------------------|---------------------------------------------------------------------|
| National Stock Exchanee of India Limited    |                         1633 |                                                                 570 |
| Bombay Stock Exchange Limited               |                         4268 |                                                                 798 |
| Mehopolitan Stock Exchange of India Limited |                          162 |                                                                   7 |

Source: SEBI

The promoters  of the oompanies  continue  to be promoters  after pledging  of their shares.  The requirement under the aforesaid Regulations  is adequate  disclosures so that the investors  may take well informed investment decisions.

- (b) and (c): In order to ensure transparency  and to following  disclosures  in the case of listed companies:protect the interest of investors,  SEBI has mandated the
- i) Regulation  31 of SEBI (Substantial  Acquisition  of Shares  and Takeovers)  Regulations,2011 requires the promoters  of a listed company to disclose  to the stock exohange(s) details  of the shares held by them  or persons acting  in concert  with them as and when pledged,  invoked or released, within a period of seven working days.
- ii) Further, Regulation 31 of SEBI (Listing  Obligations and Disclosure Requirements)  Regulations,  2015 requires  the listed cornpanies  to file the shareholding  pattern  with the stock exchange(s)  on a quarterly basis in the prescribed forrnat which includes  the disclosure  of number  and percentage of shares pledged  by the promoters  and promoter group  of the listed company.

Such information,  as and wheu received  by the stock exchange(s),  is disseminated  in the public  domain.

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