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With a new version of Companies Bill set to be introduced in the monsoon session of Parliament, the SEBI on Wednesday reiterated its earlier demand of bringing under its domain all corporate governance norms for listed companies.
“We had already requested the ministry of corporate affairs that corporate governance norms for listed companies should be within the domain of SEBI. Ultimately what comes… we will be able to know only when the Companies Bill is tabled in Parliament,” Ms Usha Narayanan, Executive Director of SEBI, said here at an industry event on Wednesday.
To bring corporate governance norms of listed companies entirely within SEBI domain, the capital market regulator had earlier proposed that scope of Section 55A of Companies Act should be widened.
Ms Narayanan pointed out that the Standing Committee on Finance had recognised the need for sectoral regulators like SEBI to have more stringent norms than what was contained in the parent Act (in this case Companies Act which is supposed to cover all companies both listed and unlisted).
Need for change
“What you perceive as regulatory overlap or a gap between SEBI and Corporate Affairs Ministry may not die away. They (MCA) are looking at regulating the larger section of a company. They can't have much stringent rules. But when it comes to accessing public money or looking at public interest, then we (SEBI) need to have set of rules that is probably little away from Companies Act provisions and which are more stringent,” Ms Narayanan said.
She also said that SEBI was open to the idea of revising its existing corporate governance norms for listed companies. “We are in the process of totally reviewing our corporate governance norms. Two persons under the Primary Market Advisory Committee are looking into it. They may make a presentation on this. There is a strong view in certain quarters that our framework is on the lines of the West and may not be best suited for India, where there are more family businesses,” Ms Narayanan said.
The SEBI official, however, made it clear that the process was in initial stages and that a consultation paper would be brought out before any final decision is taken.
On takeover code revision, Ms Narayanan hinted that SEBI may have to take a relook at 100 per cent buyback and non-compete fees as maximum feedback had come on these two issues. She however noted that it was for SEBI board to take a call on the recommendations of the Achutan committee report.
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