Sebi to unveil new disclosure norms

Nov 16 2013, 03:09 IST
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SummarySebi chief, shareholder activism has become predominant in the last five years.

The Securities and Exchange Board of India (Sebi) will come out with detailed guidelines on corporate disclosures in order to improve the governance and transparency standards of listed companies.

“There are 1,100 companies which are not compliant with the requirement of Clause 35 of shareholding pattern, which means the direction with regard to shareholding pattern has not been complied with. There are 900 firms which are not compliant with the corporate governance norms as per Clause 49 of the listing norms. You will accept that this can’t go on like this,” Sebi chairman UK Sinha said while addressing a capital market summit organised by Ficci here.

Sinha also said Sebi would have a re-look at the delisting guidelines, adding that if required, it may look at the rules for preferential allotment of shares by companies.

According to the Sebi chief, shareholder activism has become predominant in the last five years, and institutional shareholders have been joining hands with activists.

“This groundswell of activism cannot be ignored. Another trend is that while earlier, the regulations penalised companies and corporations, in the current regime, it is individuals who are being held accountable. Public opinion suggests that penalising the company adds to the cost of doing business. All these factors constitute the changing regulatory paradigm.”

Later, addressing a CII conference, Sinha said, “Globally, investors are in a state of unrest and this is intensifying ... Any small violation is being made an issue and this actually helps establish ‘shareholder democracy.”

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