Sebi to crackdown on large-scale disclosure norm violations

Nearly 1,150 companies failed to comply with disclosure norms for quarterly and annual financial results

As Sebi gears up to crack whip on corporates for non-compliance with disclosure norms, hundreds of listed companies have been found to be violating model regulations for disclosing key details such as financial results and shareholding data.

Non-compliance with regulations requiring timely disclosure of corporate governance reports and Reconciliation of Shares Capital have also come to the fore in large numbers.

The capital markets regulator is likely to issue on Monday detailed guidelines on corporate disclosure requirements in a move to improve the quality of information that needs to be disclosed by the companies to shareholders.

The proposed action follows large-scale discrepancies found in the mandatory financial and other corporate disclosures made by listed companies to the stock exchanges, a senior official said, adding that Sebi is taking the issue seriously.

While trading has been previously suspended in shares of a majority of non-compliant companies, further penal actions can be initiated against them, he added.

As per latest data compiled from disclosures made to the stock exchanges, nearly 1,150 companies failed to comply with the disclosure norms for quarterly and annual financial results, while over 1,000 companies failed to comply with disclosure rules related to shareholding pattern.

These companies either failed to disclose the data in a timely manner, or the information shared had discrepancies. While over 900 companies have not submitted shareholding data, the disclosures made by over 300 companies have errors and over 400 companies made late submissions.

With regard to financial results, close to 1,000 companies have failed to make these disclosures, over 1,100 firms have made faulty disclosures and over 600 companies submitted these disclosures after a delay.

Nearly 1,100 companies have been found to be non- complaint with 'Reconciliation of Shares and Capital Audit' regulations.

Besides, about 850 companies are non-compliant to norms for filing of quarterly corporate governance reports. Over 400 companies have made late submissions, while reports filed by over 100 companies have errors.

A majority of the firms have been found to be non- compliant on multiple fronts.

Addressing a conference on Friday, Sebi Chairman U K Sinha said: "We are going to announce something on Monday... With regard to quality of corporate disclosures, we have decided to come up with detailed guidelines about quality of corporate disclosures."

The regulator would also have a re-look at the delisting guidelines, Sinha had said, adding that the process for the same has already started.