‘SHAREHOLDER ACTIVISM COULD HELP MINORITY SHAREHOLDERS’

MUMBAI: Securities and Exchange Board of India (Sebi) chairman Ajay Tyagi on Thursday said that shareholder activism for listed companies is good for everyone, especially minority investors.

“I would say that (shareholder activism) is good for everyone, especially minority shareholders. If shareholders are cautious about their role while voting on a resolution, no one can dispute that,” said Tyagi at the 12th Financial Markets Summit of the Confederation of Indian Industry.

“One could argue about whether they are rightly advised or not, but then that is up to them. If we say that investors have a right to invest in the futures and options (F&O) market, they can invest in risky trades, they are adults, so they definitely have their own mind. It is something which no one should find fault with or should have any problem. So, it is something which is very good. I would say that the shareholders are actually applying their mind and not going by herd mentality and deciding on their feet as to what should be done in each resolution,” he said.

Defending the capital market regulator’s proposal to reduce the stock trading settlement cycle to T+1 days, from the existing T+2 days, Tyagi said early settlement is beneficial for investors and one should try to move towards it. The move has, however, drawn flak from both foreign institutional investors (FIIs) and domestic brokers.

“It is something which one should wish to go forward to. And if your systems need improvement, you should improve the systems. No one can argue that early settlement is [not] always good. And today, there is technology, so to say it is not doable, or it is not possible, is not correct. There is no harm in taking initiative in something and you can’t just say it has not happened elsewhere,” he said, adding that investors need to do some introspection.