Bombay Stock Exchange, the world’s biggest bourse in terms of listed firms, has issued show cause notices to about 800 companies for violating the listing agreement that also includes corporate governance norms.
“We have issued show cause notices to around 800 companies for violating listing agreements,” BSE managing director and CEO Rajnikant Patel told PTI.
Although Patel did not specify all the violations, he said a large number of companies were yet to comply with Clause 49 of the listing agreement on corporate governance.
More than 4,000 companies are listed on BSE. Currently, trading in shares of 1,564 companies is suspended on account of violation of various listing norms, according to BSE data.
Patel also said BSE has offloaded 26 per cent stake to foreign entities as per the current limit but it was also considering other options. “All options are still open, including listing of the exchange,” he said while declining to give any time frame for completing the process.
Regarding action taken against companies violating listing norms, Patel said since the exchange did not have the authority to impose penalty on companies, it has recommended stock market regulator SEBI to take action in many cases.
Under Clause 49, every listed firm must appoint one-third of directors as independent directors if its chairman is non-executive and 50 per cent independent directors if the chairman has executive powers.