SEBI direction to SEs on corporate governance

MUMBAI, FEB 5: The Securities and Exchange Board of India in a bid to improve corporate governance among listed companies will issue direc...

MUMBAI, FEB 5: The Securities and Exchange Board of India in a bid to improve corporate governance among listed companies will issue directions to the stock exchanges next week to amend listing agreements executed by them with the companies, D R Mehta said.

Amendments to the listing agreement would have to be carried out by the stock exchanges as per the recommendations of the Kumar Mangalam Birla committee on corporate governance, which was accepted by the SEBI board last month, and 150 companies in the `A’ group of the Bombay Stock Exchange and NSE Nifty would have to comply with the mandatory norms by March 31, 2001, Mehta said here today.

“Listed companies will be covered in a phased manner and this will lead to their performance being better known in terms of disclosure of information, financial as well as non- financial and will be an instrument of investor protection,” he said adding the companies themselves would enjoy better valuations for being transparent and responsible.

Corporates goingin for initial public offers would have to comply with the recommendations with immediate effect, he said after inaugurating a conference on corporate governance and auditing standards hosted by the Association of Chartered Certified Accountants of UK here. Companies with paid-up capital of Rs 10 crore and above or with networth of Rs 25 crore would be asked to adopt the governance code not later than March 31, 2002 and those with less than Rs 10 crore of paid-up capital, but above Rs three crore by March 31, 2003 as per the committee.

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