MUMBAI (Reuters) - The Securities and Exchange Board of India (SEBI) on Monday recommended restrictions on accessing equity and debt markets for so-called "wilful defaulters" as part of a tougher approach against those who fail to pay back bank loans.
Under law 'wilful defaulters' are classified as companies or individuals who deliberately thwart repayment of dues to lenders.
SEBI proposed that companies in which a promoter, director or subsidiary is declared a wilful defaulter not be allowed to issue equity, debt securities, or non-convertible redeemable preference shares.
However, SEBI said wilful defaulters would be allowed to raise money through private placements to institutional investors.
The regulator also proposed that wilful defaulters not be allowed to make an offer to take over a listed company in India, but added that they will be allowed to make a counter-offer in case they are the target of a hostile takeover.
The proposed regulations are in the drafting stage, and SEBI called for public comments by Jan. 23.
To access the SEBI proposal, click (http://bit.ly/1F9tnHi)
(Reporting by Himank Sharma; Editing by Rafael Nam)
