Markets watchdog to tighten disclosure norms for promotersJanuary 21st, 2009 - 6:38 pm ICT by IANS
Mumbai, Jan 21 (IANS) India’s markets watchdog Wednesday decided to tighten the disclosure norms for company promoters who pledge their shares with lenders, finding lapses during investigations into the Rs.70-billion scam in Satyam Computer Services.“The founders must disclose shares with lenders,” C.B. Bhave, chairman, Securities and Exchange Board of India (SEBI), told reporters here after a meeting of the board of the markets watchdog.
He said such disclosures would be of two types. First, when the number of shares pledged goes beyond a particular limit. Second, it will be in the form of periodic disclosures.
Bhave, however, did not specify what the watchdog meant by “particular limit”. “We will define this in the coming weeks.”
The regulator also said that the Satyam scandal, in which its founder and former chairman B. Ramalinga Raju said he had inflated the company’s cash balances and profits, would trigger a long-term system improvement.
“Whenever any such scandal happens, we need to look for long-term systemic improvements. Sometimes one can come up with quick solutions, like the one on disclosure of shares,” Bhave said.
He also maintained that the size of the Satyam scam was difficult to ascertain.