Corporate governance — SEBI to meet FIs

NEW DELHI, OCT 14: The Securities and Exchange Board of India (SEBI) is meeting the top brass of financial institutions (FIs) tomorrow at...

NEW DELHI, OCT 14: The Securities and Exchange Board of India (SEBI) is meeting the top brass of financial institutions (FIs) tomorrow at Mumbai to discuss the report on corporate governance committee appointed by the market regulator.

"We have called on the top officials from UTI, IDBI, IFCI, ICICI, LIC and GIC to take their views on the Kumar Mangalam Birla committee report," SEBI chairman D R Mehta told reporters here after a seminar on corporate governance organised by Confederation of Indian Industry (CII).

The meeting is significant as the draft report has suggested that FIs should not have nominee directors on the board of directors except in case of default or potential default.

However, Mehta said some of the FIs have said that their presence on the board of companies is necessary in order to check the potential default, specially at a time when there has been concern over increasing non-performing assets (NPAs). SEBI chief said this particular clause has been put in order to avoid insider trading as some of the FIs on the board of a company are also actively involved in the stock markets.