Mumbai:
Market regulator SEBI has pulled up SBI Life insurance for not complying with minimum public shareholding (MPS) norms and directed the insurer to be cautious in the future.
SBI Life started as a 74:26 joint venture between public sector lender SBI and BNP Paribas Cardif of France.
"The company and BNP Cardif may note that the dilution of shareholding beyond the permissible limit is not in compliance with provisions of the said circular and hence, such dilution would not be counted towards achieving MPS threshold," SBI Life said in a regulatory filing quoting the letter of Securities and Exchange Board of India (SEBI).
Further, it said, the company is advised to ensure that that the company achieves the 25 per cent MPS threshold by October 2, 2020.
"The company and BNP Paribas Cardif are hereby advised to be cautious in future and ensure compliance with applicable provisions of the SEBI Rules and Regulations," it said.
Shareholders of the company SBI and BNP Paribas Cardif have diluted 4.5 per cent (45 crore shares) and 2.5 per cent (25 crore shares) respectively in compliance with MPS guidelines.
SBI Life Insurance said that the promoters remain committed towards ensuring that the company achieves the MPS Requirement in the manner stipulated by SEBI within the time period specified.
The SEBI also pointed out that the shares sale between March 7 and April 1, 2019 in the open market were not undertaken with a view to complying with MPS norms of 25 per cent.
The promoters of the company hold sufficient shareholding in the company to adopt the methods applicable for ensuring compliance with MPS norms, it said.