Overlap in norms to be sorted out

The proposed changes in governance norms for Indian companies have led to a bit of inconsistency regarding the supervisory ambit of different arms of the central government, said a senior government official today.

The changes proposed by the Securities and Exchange Board of India in the structure of governing boards of companies listed on stock exchanges will come into effect in January. A change mandated by Sebi would extend its jurisdiction to unlisted companies, an area that is under the control of the Ministry of company affairs.

R Vasudevan, regional director (southern region) of the Ministry of company affairs, said that a move has been initiated at the appropriate level to sort the issue.

He was speaking to Business Standard on the sidelines of an orientation programme held by The Madras Chamber of Commerce & Industry (MCCI) for independent directors.

Sebi's mandated changes require a listed company (if it is a holding company) to follow its guidelines in the composition of the board of directors for a subsidiary company that is unlisted. It's in this area that there is a bit of inconsistency, explained Vasudevan.