The Securities and Exchange Board of India, Sebi will soon receive a complete list of companies who stand liable to be penalised or may face delisting for not fulfilling Clause 49 obligations under the Listing Agreement. Sebi is working on delisting norms, expected to be announced soon. The SEs gathering the data will submit the list in 10 days.
Companies were required to comply with the corporate governance requirements under Clause 49 by December 31, ‘05. Sebi has warned that companies will have to pay penalties or even face delisting if they fail to meet these requirements.
“We will soon be coming out with delisting norms,” M Damodaran, Sebi chief said. PSUs who have failed to meet the deadline may face the heat too. Sebi has already asked bourses to submit data on the extent of compliance by listed companies. “It will be seen in another 10 days,” Mr Damodaran said. He also said state-owned companies won’t be spared for failing to comply with Clause 49 requirements, which stipulate that independent directors must comprise 50% of the board’s strength if it has an executive chairman. “I am not going to give anyone more time,” he said after a SCOPE meet. He didn’t subscribe to the view of a PSU chief that there isn’t enough time to appoint directors.
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