The Hindu Business Line : SEBI moots minimum disclosure norms for restructuring of cos

THE Securities and Exchange Board of India has prescribed a set of minimum disclosures that companies undergoing restructuring need to make to their shareholders.

The disclosure would include information such as the basis of valuation, nature of consideration, mode of payment and other details that may be useful to the investor to make an informed decision.

In a circular issued on Wednesday, the regulator said several companies are not providing their shareholders with enough information in the notice calling their meeting for approval. ``It has been noted that companies undergoing restructuring under Sections 391 and 394 of the Companies Act, 1956 have not been providing sufficient information in the explanatory statement calling for shareholders' meeting for approving the same.

``It is proposed to make it mandatory for companies which enter into a scheme of arrangement to make the disclosures to shareholders in the notice/explanatory statement accompanying the notice calling for shareholders' meeting to consider and approve schemes under Sections 391 and 394 of the Companies Act, 1956. It is felt that this would give a broad picture to investors and eventually facilitate them in arriving at a decision,'' the circular said.

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SEBI moots minimum disclosure norms for restructuring of cos