From large corporates like Subrata Roy’s Sahara Group to unknown individuals perpetrating SMS investment scams,it was a year marked by many penal actions and even more policy measures by Sebi to safeguard the investors interest.
To help it bring to book fraudsters and other market manipulators,Sebi was also conferred with greater powers.
The market regulator has lined up numerous regulations to ensure effective execution of these powers along with safeguards against any possible misuse.
Summing up the year gone by,Sebi Chairman U K Sinha said that the regulator was also able to provide clarity and a direction to the market in areas like corporate governance and investor protection during 2013.
“We came out with guidelines that in case of scheme of arrangements,what are the procedures that will be followed and in that sense we prescribed that before going to the High Court,the proposal has to come to us and Sebi would apply its mind,give its comments and then only further action can be taken,” Sinha said.
This initiative followed Sebi coming across a number of instances where interest of ordinary shareholder was being compromised besides instances of illegal related party transactions.
As a result,Sebi has made it mandatory for all major schemes of arrangement involving listed companies to get “approval of the majority of minority shareholders”.
“This concept has come in and this is a very significant concept and gives a clear-cut message to the whole world that small investors cannot be taken for a ride by the promoters or other large shareholders,” the Sebi chief said.
As Sinha says,all culprits — whether big or small — are same before the regulator and it was their crime that decide the penalties.
The regulator,on its part,took actions against all sorts of entities — from Saharas,Saradha,Alchemist and Osian’s to hitherto unknown individuals taking investors for a ride through their illicit schemes.
To ensure minimum public shareholding in listed companies,as many as 105 firms,including big names like Tata Teleservices,Adani Ports & Special Economic Zone Ltd,Essar Ports Ltd,Omaxe Ltd and Gillette India Ltd,faced Sebi’s ire.
At the same time,many illicit schemes including those promising huge returns on goat farming,emu rearing,potatoes,art funds,real estate and holiday memberships,came under Sebi radar with their perpetrators facing crackdown.
For listed companies,Sinha said,Sebi is taking actions to ensure regular disclosure about key developments.
“Although listing agreement provides for a number of things,but our information was that a big number of companies were not complying with it,” Sinha said.
The new norms also provides for small investors remaining insulated while any action is taken against non-compliant companies.
“What it means is that there is a routine practice currently going on that if some company is violating requirements of listing agreement,then the trading would be suspended. That was the thing being done.
“But we came to the conclusion that this is going against the interest of the shareholders. So,the new procedure says that there would be a penalty on the promoters,penalty on others who may be in violation and then there will be continued…
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