Thursday, January 10, 2013

Sebi warns companies against market misconduct

Sebi chairman UK Sinha warned corporate houses of stern action if they don’t adhere to the regulator’s norms and they are caught for serious market misconduct.

“We have introduced a very sophisticated surveillance mechanism and every day we’re getting hundreds of alerts through a data warehousing system and I would like to ensure the investing community that we will thwart any attempts to bypass the rules of the market,” Sinha said at an Assocham seminar here.

“We’re taking all possible decisions and measures to ensure that nobody is able to avoid the rules of the games especially on a continuous basis to harm the interests of the individual and institutional investors,” he said.

On the consent mechanism, Sinha said, “We’ve come out with new guidelines on consent mechanism and if any corporate or individual is found going against that policy then a stern action will be taken.”

Sebi has also sought the reasons as to why certain independent directors, citing that things have not been going as per standard practices, are silently withdrawing themselves thereby resigning in an impulsive and haphazard manner, Sinha said.

On the issue of executive compensation, Sinha said the short-term interest of senior executives should not guide the company into taking unnecessary risks, which precisely has been the problem in many large companies over the course of the last five years.

“Going forward, we think there should be some norms on the subject and that is why we want to set up certain parameters without doing anything in a disruptive manner and will implement it stage-wise.”

Sinha said the government has assured the Sebi that listed public sector undertakings will meet the August 2013 deadline to meet the capital markets regulator’s 25 per cent mandatory public shareholding norms.

“I am happy to inform that we have received confirmation from government that it will abide by public shareholding guidelines within the timeframe,” he said.
ENS Economic Bureau : Mumbai, Thu Jan 10 2013, 00:35 hrs

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