The Securities and Exchange Board of India (Sebi) will shortly be coming out with regulations for the silent period of companies' initial public offers, in a move aimed at curbing the hype being created about the companies during silent period, M Damodaran, chairman of Sebi, said on the sidelines of a FICCI conference on market reforms & corporate governance imperatives. Some hype is being generated about companies during the period from filing of their draft prospectus with Sebi to announcement date to push up the prices. Sebi's norms - to be out in a few weeks - would direct companies and market forces to talk only about the information provided in the propsectus during the silent period, Damodaran said. Sebi would look into the composition of boards of companies to assess the quality and independence of the independent directors. Corporate governance is not just about numbers, but about the quality of the people on board, Damodaran said.Good corporate governnance is at least a necessary condition if not sufficient condition for the long time sustainable delivery of values to the shareholders.Without going through the experience of Enron or Worldcom, we can put regulations in place...Many other markets are receiving guidance from India on corporate governance, Damodaran said.No rating of companies should be done before having the climate of corporate governnance in the country. Till large number of companies practice corporate governnance, let us not get into the practice of rating companies and giving away awards, Damodaran added.
