At a time when boardroom tussles at storied companies have put the spotlight on corporate governance, the committee appointed by the Securities and Exchange Board of India (SEBI) to look into such issues is all set to submit its report.
The Uday Kotak chaired committee will submit its report by this month end, said SEBI chairman Ajay Tyagi.
Speaking at a capital market seminar organised by industry body FICCI, Mr. Tyagi said there was scope for significant improvements in corporate governance and disclosures regarding related-party transactions and board accountability.
“We feel much needs to be done on corporate governance... Improved disclosures on related-party transactions and accountability and evaluation of boards are issues that seriously need to be looked into,” he said.
Among other areas, the 24-member panel was tasked to submit recommendations for “ensuring independence in spirit of independent directors and their active participation in functioning of the company” along with “disclosure and transparency-related issues”.
The recommendations assume significance as the recent past saw the role of independent directors being questioned in Infosys and also some of the Tata Group companies.
Incidentally, in the case of Infosys, the board issued a statement refuting the allegations made by founder N.R. Narayana Murthy after chairman Vishal Sikka resigned. However, some of the directors resigned when Nandan Nilekani was named the chairman.
Meanwhile, the SEBI chairman stressed on the fact that the regulator is serious about issues that enhance the participation of minority shareholders and has put in place regulations to safeguard the rights and independence of independent directors.
Further, at a time when stressed assets and bad debts are in the focus, Mr Tyagi said that there is a need for increased coordination between regulators to ensure that issues are resolved at the earliest.
Also present on the occasion, SEBI whole time member G Mahalingam said that the regulator is is also in the process of reviewing mutual fund regulations to bring in more clarity for investors in terms of the nature of funds.
Mr Mahalingam,who earlier worked with the Reserve Bank of India (RBI), said that fund houses should merge similar schemes and the nomenclature should be clear so that the investor knows whether he is investing in equity, debt or a hybrid scheme.
Currently, the Indian mutual fund industry has around 2,000 schemes spread across over 40 fund houses.
In terms of the role played by mutual funds as institutional investors, Mr Tyagi said that a beginning has been made with SEBI directing mutual funds to disclose information on their voting policy on board resolutions.
Reuters reports:
A senior SEBI official warned about the impact of “huge” foreign investments on the rupee and called for ways to manage the inflows through “a calibrated system.”
The comments, by Whole-Time Member G. Mahalingam, mark the strongest public comments this year from a regulator about the effects of strong inflows in pushing up the currency.
Foreign investors have bought a net $23.1 billion in Indian debt so far this year.
They have been net buyers of $6.8 billion in shares.
“A huge amount of foreign inflows into the country at a time when the currency in the country has been showing a substantial amount of appreciation is something which the regulator is going to be concerned about,” Mr. Mahalingam said.