Act against Clause-49 violators, Sebi tells bourses

Stock exchanges would be "persuaded" to take action against some big companies that are not complying with Clause-49 regulations before this year ends, M Damodaran, chairman of Securities and Exchange Board of India (Sebi), said today.

"Before the year is out, we will persuade exchanges that a few of the companies that are big and able to comply (with the Clause-49) but have not complied because they did not think it was important enough," the Sebi chief said, at a CII-organised workshop on `Corporate India taking Clause
49 forward'.

I hope action by the stock exchanges would put pressure on managements of companies from international investors and other stakeholders to see that compliance takes over, Damodaran said.

Clause-49 rules, which came into effect from January 1, 2006, seek to bring about an all-round enhancement in corporate governance standards through greater independence of board of directors, a code of
conduct for board members, larger role of audit committee, enhanced disclosures, greater accountability for CEO and CFO, among other things.