Sebi: promoters must give details of pledged shares

Written by Markets Bureau | Mumbai | Updated: Jan 23 2009, 04:53am hrs
Sebi has started tightening regulatory norms to restore the faith of investors in the securities market which eroded following the Satyam scam. The regulator has decided to make it mandatory on the part of promoters to disclose the details of pledging of shares held by them in listed entities promoted by them. Sebi has taken this decision at a board meeting called to discuss issues related to the Satyam fiasco. After the meeting, Sebi chairman CB Bhave said, The disclosures shall be made as and when the shares are pledged (event based disclosure) as well as by way of periodic disclosures.

The period disclosure will be made every quarter. The regulator is working on the other aspects of this regulation which will be made public soon.

Bhave said, The promoters will convey the details of pledges of shares to the company and the company shall in turn inform the same to the public through stock exchanges. The pledging of the shares in the event base will have limit. Necessary steps to amend the relevant regulations and the listing agreement are being taken.

Bhave said two to three investigating agencies Andhra Pradesh government, MCA and Sebi are probing the Satyam case. There is a rule of law and we are taking necessary permission from judiciary to proceed in the case, he added.

With regard to the role of independent directors, he said the board is reviewing their roles in the company board. We have written a letter to the Union government to appoint independent directors on the PSU board, he said.

Sebi is getting account details of the Satyam from various banks. We are taking information from two or three places, including from Integrated Market Surveillance, he said. Although he refused to comment on the progress of the investigation progressing. No formal investigation has been ordered into Maytas Infrastructure, he said, adding Sebi had not yet received any request from the newly formed Satyam board for more time to publish the December quarter results.

In Pyramid Saimra case, Sebi said it has already filed a criminal complaint for the forged letter of the regulator. We are in touc h with the police, he said.