The Asian Age

No com­pro­mise on good gov­er­nance norms: Sebi

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New Delhi, Sept. 1: Un­per­turbed by in­tense lob­by­ing by in­dus­try, cap­i­tal mar­kets reg­u­la­tor Sebi has said that listed com­pa­nies must follow higher cor­po­rate gov­er­nance stan­dards and there will be no di­lu­tion to the new norms kick­ing in from next month.

At the same time, the reg­u­la­tor’s doors are open if firms want to dis­cuss any ap­pre­hen­sions they might have and those can be re­solved in the mean­time to help them adapt to the new reg­u­la­tions, Sebi chair­man U. K. Sinha said.

He made it clear how­ever that there can be no com­pro­mise on safe­guard­ing the in­ter­est of in­vestors, say­ing that this was of paramount im­por­tance in the new cor­po­rate gov­er­nance norms com­ing to ef­fect from Oc­to­ber 1.

Among oth­ers, the new reg­u­la­tions give more pow­ers to mi­nor­ity share­hold­ers on var­i­ous is­sues such as re­lated party trans­ac­tions, ap­point­ment of direc­tors and CEO salaries, while listed com­pa­nies would also have to manda­to­rily ap­point a woman di­rec­tor and put in place whis­tle- blower mech­a­nism.

Many of th­ese pro­vi­sions are common to those pro­vided in the new Com­pa­nies Act, while Sebi has de­cided to keep the bar higher for listed com­pa­nies in terms of cor­po­rate gov- er­nance. A con­sul­ta­tion process was launched by Sebi for the new norms way back in Jan­uary 2013 and fi­nal norms were pro­posed after tak­ing into ac­count the com­ments from pub­lic and var­i­ous stake­hold­ers. How­ever, the reg­u­la­tor is now be­ing crit­i­cised in some quarters for be­ing harsher vis- a- vis listed com­pa­nies.

“New com­pa­nies law was en­acted in Oc­to­ber 2013, but now there is lob­by­ing from cor­po­rate In­dia that Sebi is work­ing like an ac­tivist. One com­ment from some very re­spon­si­ble sec­tion was that Sebi is act­ing like a dragon. Th­ese things are go­ing on and on,” Mr Sinha said in an in­ter­view.

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