Pulling up public sector undertakings for not complying with corporate governance norms, Sebi chairman Ajay Tyagi on Monday called for similar rules for both public and private sector firms and said that there should no preferential treatment of state owned companies. Speaking at an event organised by Standing Conference of Public Enterprises (SCOPE), a professional organisation representing central government public enterprises, Tyagi said that having different norms for listed public and private firms might be “perceived wrongly”.
While the PSUs are required to meet the 25 per cent public float norm by August 2017, there have been suggestions from certain quarters of the government that the deadline should be extended. The Securities and Exchange Board of India (Sebi) chairman, however, said the regulator would have a dialogue with the government on compliance of these companies with certain regulations as the idea is to ensure that public and private sector companies follow the same rules.
“To have differentiation between government PSUs and private companies may not be that easy. It may be perceived wrongly,” Tyagi said while interacting with senior officials of public sector undertakings and responding to queries. Tyagi said that Sebi would take up regulations which can be followed straight away by the PSUs whereas the ones that depend on government will be taken up separately. “The ones which depend on the govt, we will have a separate dialogue with the DPE (Department of Public Enterprises) and other stakeholders and see how they can be implemented in letter and spirit,” he said. To queries from reporters about PSUs’ compliance with minimum public shareholding norms, the Sebi chief said some companies have written to the regulator and the matter has been referred to the government to take a view.
The Sebi chief also raised the issue of meeting with the corporate governance standards. Pointing that 20 per cent of public sector enterprises still do not have a woman director and around 90 per cent of them do not have the required number of independent directors, Tyagi emphasised on the need for improved corporate governance practices at listed PSUs.
“As per my information, 20 per cent PSUs still don’t have a single woman director. I am told that perhaps three PSUs have been non-compliant from the beginning…….may be at the end of last month, 90 per cent of them did not have full independent directors who are supposed to be there. That is a very huge number,” Tyagi said. He said that much needs to be improved on functioning and appointment of independent directors and audit committees at listed companies, he pointed that in many cases, independent directors are appointed and removed at whims and fancies of promoters of firms.
While concerns have been raised in the past on the role of independent directors, Tyagi said that the role of nominee directors also needs to be looked into. Nominee directors are appointed by promoters and other major shareholders, including the government in case of PSUs, on boards of the companies.
(With PTI inputs)