The Hindu Business Line : `Punish cos for Clause 49 non-compliance'

Companies that have not yet complied with the Clause 49 of SEBI's corporate governance regulations should be fined, said Mr Deepak Parekh, Chairman of Housing Development Finance Corporation.

Mr Parekh, who is also the Chairman of SEBI's primary market advisory committee, said around 50 per cent of the listed companies are yet to file compliance details with stock exchanges.

Despite SEBI's stringent deadlines on compliance, as on February 1, as many as 2,020 companies out of the 4,149 companies listed on the BSE, have not filed the required information with the stock exchange, he said.

Till date, he said, no company has been penalised for non-compliance of Clause 49.

Clause 49 stipulates that at least one third of the listed company's board of directors consists of independent directors. This is mandatory for all companies with a paid-up capital of Rs 3 crore or more.

Setting an example

Speaking at a CII seminar on "Relationships between good governance and good performance", Mr Parekh said regulators should wake up and penalise erring companies.

De-listing is not the right punishment. Imposing fine, even if the amount is not significant, would set good example, he said.

Small companies may be facing a genuine problem in finding enough number of independent directors, he said.

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