SEBI Clarifies Liberty Shoes Promoter Reclassification Under Regulation 31A Rules

The Securities and Exchange Board of India (SEBI) has provided regulatory clarification on the promoter reclassification process for footwear maker Liberty Shoes Limited, emphasizing that such requests must strictly comply with the extant provisions of Regulation 31A under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The clarification addresses long-standing regulatory questions surrounding the status of two promoter entities seeking to transition into the public shareholding category.

Regulatory Position and Exchange Applications

SEBI stated that it holds no predetermined view on the eligibility of the applicants—specifically Arpan Gupta, acting individually and as Karta of Dinesh Kumar Gupta HUF—for reclassification to the public category. Instead, the regulator underlined that applications must be evaluated on their merits under the established legal framework.

The regulator also noted that past administrative warnings issued against Liberty Shoes remain valid on record but do not restrict or block the ongoing processing steps for reclassification. Formal applications for obtaining No-Objection Certificates (NOCs) remain pending review with both the National Stock Exchange (NSE) and BSE.

Background on Regulatory Warnings

The regulatory scrutiny traces back to requests first submitted by Arpan Gupta and Dinesh Kumar Gupta HUF on March 23, 2024, requesting reclassification from the "Promoter and Promoter Group" category to "Public".

In July 2026, SEBI issued an administrative warning to Liberty Shoes after identifying procedural lapses under corporate governance norms:

• The Board of Directors had concluded that the promoters did not satisfy reclassification conditions and rejected the requests via email on June 7, 2024, rather than placing them before shareholders in a general meeting as mandated by Regulation 31A(3)(a)(ii).
• SEBI reiterated that the board of a listed company is not empowered to unilaterally decline placing valid promoter reclassification requests before shareholders.
• The company failed to make required disclosures under Regulation 31A(8)(b) read with Regulation 30(7) regarding the board meeting held on May 29, 2024, which evaluated the reclassification requests.

Steps Toward Compliance

Following the administrative warning, Liberty Shoes initiated corrective steps. On August 18, 2026, the company submitted formal applications to the NSE and BSE seeking approvals and NOCs under Regulation 31A of the LODR framework.

The clarification from SEBI reinforces that listed entities cannot bypass mandatory shareholder approval mechanisms when evaluating changes in promoter classifications, setting a clear regulatory precedent for corporate governance across Indian listed entities.

Tags: Liberty Shoes SEBI BSE NSE Footwear Sector Corporate Governance