While India has been ranked 100th overall in terms of protecting minority investors, it has got a much higher 4th position for protecting minority investors, which officials attributed to several reforms undertaken by the capital market regulator Sebi (Securities and Exchange Board of India).
Within the area of 'protecting minority investors', India scored 10/10 for protection of shareholders' rights -- as against 4/10 for the US, 5/10 for Australia, 7/10 each for the UK, Singapore and New Zealand.
India has scored 8 each on corporate transparency, disclosure and ownership and control parameters and a 7 each on director liability and shareholder suits.
"India strengthened minority investor protections by increasing the remedies available in cases of prejudicial transactions between interested parties. This reform applies to both Delhi and Mumbai," the report noted.
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The top five countries -- New Zealand, Singapore, Denmark, South Korea and Hong Kong and -- in the ease of doing business index have scored in the range of 6 to 7 in the area of protecting rights of shareholders.
Sebi's contribution has mainly been areas of disclosures, shareholders' rights and corporate transparency among others.
To safeguard minority investor, Sebi has taken several reform initiatives including taking prior approval of the audit committee necessary for related party transactions.
Among others, Sebi's listing rules cast responsibility on board of directors and key managerial personnel to disclose to the board whether they, directly, indirectly, or on behalf of third parties, have a material interest in any transaction affecting the listed entity.