Liberty Shoes Limited received an administrative warning from the Securities and Exchange Board of India (SEBI) regarding non-compliance with regulations tied to the reclassification of two promoter shareholders. The regulator observed that the company failed to disclose material developments and did not place the reclassification requests before shareholders as required. This regulatory scrutiny impacts the company's corporate governance standing and requires immediate corrective action to align with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The issue stems from requests dated March 23, 2024, submitted by Shri Arpan Gupta, individually and as Karta of Dinesh Kumar Gupta HUF, to reclassify their status from "Promoter and Promoter Group" to "Public". SEBI noted that while the company initially disclosed the consideration of these requests, it failed to update the stock exchanges on the final outcome. Specifically, the Board of Directors formed its views on the requests during a meeting on May 29, 2024, but the subsequent disclosure of this meeting's outcome did not reference the requests or the Board's final consideration.

Consequently, SEBI observed that Liberty Shoes did not comply with Regulation 31A(8)(b) read with Regulation 30(7) of the LODR Regulations. These regulations mandate the disclosure of board meeting minutes considering such requests as a material event and require regular updates until the event is resolved. The regulator has viewed this non-compliance seriously and warned the company to improve its compliance standards to avoid future enforcement action.

Furthermore, SEBI advised that the Board of Directors is not empowered to decline placing such requests before shareholders. The regulator observed that the Board, having concluded the promoters did not satisfy reclassification conditions, rejected the requests via email on June 07, 2024, rather than placing them before a general meeting for approval. This action was found to be not in accordance with Regulation 31A(3)(a)(ii).

In response to the observations, Liberty Shoes must place the reclassification requests before shareholders in a general meeting, along with the Board's views, and process the requests further as per the regulatory framework. The company is also required to take corrective steps, place the communication before its Board, and disseminate the details on the stock exchanges. The company stated that the communication is under examination with legal advisors and confirmed that no monetary penalty or enforcement action has been imposed.

Arpan Gupta, a member of the promoter group at liberty shoes , sold 10,000 equity shares on June 25, 2026, reducing his stake in the footwear manufacturer. The transaction was executed through the open market, as disclosed in a filing submitted to the stock exchanges on June 26, 2026. The sale was conducted under the provisions of Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Prior to the sale, Gupta held 3,24,594 shares, which accounted for 1.905% of the company's total paid-up voting capital. Following the disposal of 10,000 shares, his holding has decreased to 3,14,594 shares. This revised stake represents 1.846% of the total voting capital of Liberty Shoes Limited. The total equity share capital of the company remains Rs. 17,04,00,000, divided into 1,70,40,000 equity shares of Rs. 10 each.

Shareholding Details

The disclosure outlines the specific changes in Gupta's shareholding pattern. The table below details the holdings before and after the transaction:

Persons Acting in Concert

The filing also includes a list of Persons Acting in Concert (PAC) with the seller. The total shareholding of the promoter group, including these persons, stands at 1,00,60,506 shares, which aggregates to 59.039% of the total paid-up voting capital of the company. Key members of the promoter group include Geofin Investments Private Limited, which holds a significant 26.247% stake, and other HUFs and individuals associated with the promoter group.