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Tuesday, Dec 16, 2003

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SEBI seeks more powers under Companies Act

Richa Mishra
K.R. Srivats

New Delhi , Dec. 15

THE turf war between the Department of Company Affairs (DCA) and Securities & Exchange Board of India (SEBI) for overseeing the functioning of the listed companies continues unabated.

The capital market regulator, it appears, is still not happy with the powers vested with it under the Companies Act, 1956, in respect of listed companies and has asked for more.

Official sources confirm that SEBI has now written to the Finance Ministry seeking more powers under the Companies Act for monitoring the listed public companies. However, the capital market regulator's letter is said to be silent on the provisions under the Act it would like to administer.

At present, Section 55 A of the Act confers SEBI the right to administer certain provisions relating to the issue and transfer of securities and non-payment of dividend in the case of listed public companies and those companies that intend to get their securities listed.

Companies Act currently stipulates that all powers relating to all other matters including those relating to prospectus, statement in lieu of prospectus, return of allotment, issue of shares and redemption of irredeemable preference shares shall be exercised by the Central Government, Company Law Board, Registrar of Companies as the case may be.

Informed sources said, there is no meeting point between the DCA and SEBI on the powers that need to be further conferred upon the capital market regulator for monitoring the listed companies.

"What more powers do they want? They already enjoy powers under Section 55 A. If they desire more, they will have to clearly spell out and for this discussions are needed between all concerned," Finance Ministry sources told Business Line.

The tussle between the two regulators for overseeing the functioning of listed companies has been there for the last number of years leaving India Inc sometimes crying foul on the regulatory overkill.

The composition of a company's board is one issue on which the last word is yet to be written by the regulators, say corporate observers.

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