Perils of dual class shares

Sebi should not rush to import foreign norms to India

The Securities and Exchange Board of India (Sebi) has constituted a committee to examine the norms governing the issue of shares with differential voting rights — dual-class shares, as they are also known — by listed companies in India. Worldwide, such shares are used, particularly by companies in the technology sector, so that ordinary investors can participate in the growth shown by these companies in valuation while allowing the original promoters or founders to retain control even with small beneficial interest. From the Indian perspective, the hope is that companies operating in the Indian market will be encouraged to list