SEBI plans tighter norms for corporate governance: Sinha
21 December 2013
The Securities and Exchange Board of India (SRBI) will soon announce new corporate governance norms in order to bring them in line with the best global practices, chairman U K Sinha said in Mumbai on Friday
"Our consultation is almost over and we are now going to promulgate our rules very soon," Sinha told journalists at a corporate governance summit organised by the Confederation of Indian Industry (CII).
"For listed companies, we would like to tell you that if we are going to do something over and above what is specially mentioned in the Companies Act in the interest of corporate governance of the large corporates, but this would be after consideration with all stakeholders," he said.
As several companies have operations outside India and many more would be venturing in foreign territories, there is a need to align rules with the best in the world. "We don't only have the problem of foreign guidelines and standards, we also have to deal with extra- territoriality of foreign laws ... we have to cope with them," Sinha said.
The chief of India's market regulatory body said as many as 1,100 listed companies are not compliant with Clause 40A of the Listing Agreement and over 900 firms don't follow Clause 49.
Clause 40A deals with minimum level of public shareholding, and Clause 49 deals with corporate governance issues like the constitution of the board of directors and top management of company.
Sinha requested all corporates to help SEBI ensure that India reaches a level of corporate governance that "is much higher and which is in keeping with the best in the world". He also asked companies to show real commitment towards corporate social responsibility.
Besides, Sinha said that the regulator is watching the increasing number of proxy advisory firms springing up.