Infosys row: Sebi says will not spare anyone if found guilty

File photo of Vishal SikkaFile photo of Vishal Sikka
MUMBAI: Amid the IT giant Infosys coming under the scanner for alleged corporate governance malpractices, Sebichairman on Friday said the regulator will not spare any violations irrespective of whether the entity found guilty is big or small.

“Any input that we receive from any source is taken to its logical end. Sebi does not believe that just because some allegations have been made, it is true,” Sinha told reporters at the international conference of commodity derivatives.

“We have to apply our mind and follow the due process. All I can assure you is that after an investigation if we conclude that something wrong has happened then they will not be spared howsoever big or small they are,” he said without naming any company.

Infosys has become the latest major corporate to attract regulatory attention for alleged corporate governance lapses being played out in public after the Tatas, United Spirits and Ricoh India, among others.

A senior SEBI official had recently told PTI that they are keeping a “close watch” on all the developments with a “special focus” to ensure that minority investors’ interests are safeguarded.

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Very excellent move by SEBI, now real culprits to be punished.RaMa Rajya

While Infosys and its top management led by chief executive Vishal Sikka have put up a brave face saying all was well in the company and denied any misgovernance or any other lapses, there have been reports that the founders of the IT giant are not happy with the current leadership team.

Some former Infosys executives have also raised questions about the way the company is being run currently, as also about the pay packages of some people including severance deals given to a few.


Sebi allows foreign investors to buy shares via primary markets

Representative image.Representative image.
NEW DELHI: Markets regulator Sebi has allowed foreign investors to acquire shares through primary markets in depositories and clearing corporations.

Prior to this, foreign investors could acquire shares of depositories and clearing corporations only through secondary market.

The move comes at a time when Central Depository Services Limited (CDSL) is preparing to launch its initial public offering.

As per norms, total foreign holding in depositories and clearing corporations is capped at 49 per cent.

The Securities and Exchange Board of India (Sebi) has now amended Stock Exchanges and Clearing Corporations regulations as well as Depositories and Participants norms, to drop a provision that required purchase of shares by foreign investors within 49 per cent limit only through secondary markets.

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Sebi evolving as per needs of economy: Jaitley

NEW DELHI: Finance minister Arun Jaitley today said Sebi is evolving as per the requirements of the economy and markets as a professional organisation, as he discussed his Budget initiatives with the markets regulator.

After addressing Sebi’s board and top officials at a customary post-Budget meeting, Jaitley said he also discussed the future agenda for the capital markets regulatory body, including the evolving technological and policy changes.

“Sebi is a professional organisation with a considerable experience in this line and has been evolving as per the needs of the economy and the markets itself,” Jaitley told reporters after his post-Budget address to Sebi’s board.

“Primarily, we discussed issues relating to markets … subjects related to future agenda, some of which are Sebi’s own agenda because of various evolutions in markets and technologies and some of which are necessitated by Budget announcements…

“It is those subjects which we have discussed at the meeting today,” the Minister said.

Minister of state for finance Arjun Ram Meghwal and Sebi’s chairman designate Ajay Tyagi, currently additional secretary in finance ministry, were also present.

Sebi’s current chairman U K Sinha was present in the meeting along with other board members and top officials of the regulatory body. Sinha’s term would end on March 1, after which Tyagi will take over.

Besides chairman, Sebi’s board comprises whole-time members, independent directors and nominees from Finance Ministry, Corporate Affairs Ministry and the Reserve Bank.

Sebi was established in 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.

It was set up with a mandate “to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto”.

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Making changes as per changing environment.Jag Mohan

Besides regulating stock exchanges and other market infrastructure institutions, Sebi also regulates and supervises various kinds of market entities including brokers, mutual funds, FIIs, rating agencies and investment bankers, as also thousands of listed companies.

Sebi has also been given charge of regulating commodity derivatives market after merger of erstwhile Forward Markets Commission (FMC) with it.


Tata-Mistry saga: Sebi finds no violations, mulls stricter norms

File PTI photographFile PTI photograph
NEW DELHI: Amid the Tata-Mistry battle, Sebi feels that the board of a company can continue to seek expertise of a ‘Chairman Emeritus’ even after the person has left the company, though the regulator appears to be in favour of stricter norms for removal of independent directors.

Ever since the boardroom battle erupted at the conglomerate after removal of Cyrus Mistry as chairman in October last year and subsequent allegations by him, including about ‘interference’ by Ratan Tata, Sebi has been keeping a close watch on the developments related to the group.

The markets regulator has carried out a detailed scrutiny of any possible breach of securities laws, including about corporate governance and insider trading norms, a senior official said.

However, no serious breach of the existing provisions has been found so far and any violation that may come to light would be dealt with accordingly, the official added.

At the same time, the regulator is of the view that the Tata-Mistry episode has shown that further tightening of rules may be required for removal of an independent director.

This stance, which will be shared with the Corporate Affairs Ministry, has emerged since the norms for re-appointment of independent directors are much stricter already.

Sources said that Sebi apprised its board in the last meeting about the developments regarding Tata-Mistry case, including the allegations of irregularities in removal of independent directors and on sharing of sensitive information with Chairman Emeritus.

It was felt that when a person is appointed Chairman Emeritus, the company’s board can discuss with the person various issues relating to corporate performance, mergers and acquisitions, divestments and other important details to benefit from the person’s experience.

According to Sebi, communication of unpublished price sensitive information can be done for “legitimate purposes, performance of duties or discharge of legal obligations”.

Under Sebi (Prohibition of Insider Trading) Regulations, communication of unpublished price sensitive information (UPSI) is permitted if it is in furtherance of legitimate purposes, performance of duties or discharge of legal obligations.

With respect to independent directors, the view is that special resolution should be passed for their removal as is the case for their re-appointment.

A special resolution requires approval of at least 75 per cent of shareholders while only 50 per cent is needed in the case of an ordinary resolution.

Sources said a decision in this regard would be taken after discussions with the Corporate Affairs Ministry, which is implementing the Companies Act