Sebi asks Schneider Electric to list on national bourse or give exit option to shareholders

Market regulator Sebi has asked Schneider Electric President Systems to either list on a stock exchange having nationwide terminals within six months or provide exit to its investors under the delisting norms.

Sebi said that if the company opts for de-listing, the reference date for computing the floor price would be the date on which the company made the public announcement for the exit offer.

Further, the shareholders who had tendered their shares in exit offer would be given an opportunity by the company for buying back the shares at the exit price, Sebi said in an order passed on Tuesday.

Schneider Electric President Systems, a leading designer, manufacturer and supplier of standard and customised enclosure systems in India, was earlier listed on the Bangalore Stock Exchange (BgSE) and Pune Stock Exchange (PSE).

Following the de-recognition of BgSE and PSE in 2014 and 2015, respectively, the company moved to the dissemination board (DB) of the NSE in July 2016.

Prior to being moved to the DB, the 2012 and 2014 circulars issued by Sebi had cast an obligation on the company to migrate to a nationwide exchange or provide an exit option to the shareholders in terms of the delisting norms.

In addition, exclusively listed companies (ELCs) of de-recognised bourse were required to exercise one of the options prior to the exit of the stock exchanges where they were listed.

Sebi said it has not seen any evidence of efforts made by the company to comply with either of the said options prior to the exit of the BgSE and PSE.

“Therefore, admittedly, the company has not been in compliance with the provisions of the said circulars issued by Sebi as it neither made any efforts to migrate to a nationwide exchange even though it satisfied the listing norms of one such exchange nor made a delisting offer under the Delisting Regulations,” Sebi noted.

Schneider Electric President Systems opted for delisting option in 2017 instead of listing shares on a national stock exchange. 

Schneider Electric South East Asia, the promoter of the company, made a public announcement in January 2011 to acquire up to 75 per cent equity shares of the company and categorically emphasised its intention to delist.

In February 2017, the company announced its exit offer proposal for its public shareholders at the fair value price of Rs 200.40 per share arrived at by the independent valuer. The exit offer was opened on February 24, 2017, and closed on March 10, 2017.

The company had a total of 1,986 non-promoter shareholders till February 2017 and they were together holding 25 per cent stake. Out of these 1,986 shareholders, 344 shareholders participated in the exit offer and tendered their shares, the regulator noted.

“I note that the company, which was satisfying the eligibility criteria to move to a nationwide stock exchange, cannot be allowed to take advantage of the diluted delisting criteria prescribed under the 2016 circular,” Sebi Whole Time Member G Mahalingam said. 

He added that had the company complied with the 2012 or 2014 criteria and got itself listed on a nationwide stock exchange, it would have had to follow the process specified under the de-listing regulations for getting delisted. 
 
“However, having carefully considered the evolution of policy in this regard, I am of the view that the question here is not regarding the right of a company to get delisted,” he added. 

The question rather here is regarding the eligibility of a company which was fulfilling the criteria to migrate to a nationwide stock exchange seeking to delist by taking advantage of the diluted delisting norms prescribed under the 2016 circular, Mahalingam added. 
 
The question rather here is regarding the eligibility of a company which was fulfilling the criteria to migrate to a nationwide stock exchange seeking to delist by taking advantage of the diluted delisting norms prescribed under the 2016 circular, Mahalingam added. 
 
Accordingly, Sebi has directed President Systems Ltd to, within a period of six months, either list the equity shares of the company on a stock exchange having nationwide terminals or delist the company following the procedure prescribed under the delisting norms. 
 
The NSE has been asked to monitor the compliance of the company with Sebi’s directions.

About Schneider Electric

Schneider Electric is leading the Digital Transformation of Energy Management and Automation in Homes, Buildings, Data Centers, Infrastructure and Industries. With global presence in over 100 countries, Schneider is the undisputable leader in Power Management – Medium Voltage, Low Voltage and Secure Power, and in Automation Systems. We provide integrated efficiency solutions, combining energy, automation and software. In our global Ecosystem, we collaborate with the largest Partner, Integrator and Developer Community on our Open Platform to deliver real-time control and operational efficiency. We believe that great people and partners make Schneider a great company and that our commitment to Innovation, Diversity and Sustainability ensures that Life Is On everywhere, for everyone and at every moment.

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