Companies delaying or not filing full disclosures with stock exchanges and with the market watchdog, Securities and Exchange Board of India (Sebi), as mandated will face a penalty of up to Rs 1 crore, a Sebi representative said.
“Under certain categories, companies which acquire shares beyond a certain percentage stipulated under the regulations are required to make disclosures. Under the Sebi Act, offenders are liable to a maximum penalty of up to Rs 1 crore for not filing disclosures,” the Sebi representative said at a seminar on corporate governance organised by the Institute of Company Secretaries of India (ICSI) here.
“The names of offending companies will be put up on our website, which people and investors can read. That is the only way to punish them,” he added.
The Sebi representative said the standard of corporate governance in the country still had a long way to go.
“We have taken action against offenders in the past and will impose penalties even in the future,” he said.
The Sebi official said many questions need to be addressed in this regard and cautioned investors not to get carried away with anyone who says he is compliant with Clause 49.
Clause 49 is an important aspect of corporate governance relating to independent directors on a company’s Board. The Sebi representative said that “it is indicative and is only about 10 per cent of corporate governance.”
On the Satyam fraud, he said the scam had been concocted in collusion with the entire system and would take time to unravel. “It (the scam) has been going on for so many years...A very well-planned incident like this cannot be unlocked so easily and quickly,” he said.
