Appoint at least 2 more independent directors, Sebi tells government

MUMBAI: The Securities and Exchange Board of India (Sebi) has written to the finance ministry seeking the appointment of at least two independent members, said two people with direct knowledge of the matter.

The aim is to resolve the problem of “lack of independent voices on its board”.

The move comes against the backdrop of the markets regulator not having enough independent directors, though such directors and their responsibilities towards boards have assumed increased importance in the wake of recent changes to corporate governance norms.

Sebi prescribes that half of its directors should be independent.

However, its board has eight members, including the chairman and four whole-time directors. As such, less than half of the board is made up of independent directors.

The Sebi board is led by chairman Ajay Tyagi and has Madhabi Puri Buch, G Mahalingam, Ananta Barua, and SK Mohanty as whole-time members. The three independent members are Subhash Chandra Garg, secretary, department of economic affairs, Inteji Srinivas, secretary, ministry of corporate affairs, and NS Vishwanathan, deputy governor, Reserve Bank of India (RBI).

The letter to the finance ministry aims at doing away with the issue of “lack of independent voices on its board”.

“Sebi has written to the finance ministry seeking the appointment of two more independent members to its board to ensure that at least half the board is made up of independent members,” said an official, requesting anonymity.

The equations on the board of the market regulator changed when part-time board member and senior lawyer Arun Sathe stepped down earlier this year and Sebi got an additional whole time member.