MUMBAI: Sebi chairman Ajay Tyagi today said the decision on proposed norms necessitating listed companies to make urgent disclosures about all major loan defaults lies with the regulator's board.
Without giving details on the proposed plans, Tyagi said the issue was "deferred by the Sebi board last time." When asked if the proposed norms have been withdrawn, Tyagi said that "the decision lies with the board", speaking on the sidelines of IVCA conclave here.
The new rules were to come into effect initially from October 1, 2018 but deferred, after banks had asked for more time for the new rules as the domestic credit market was different from its Western counterparts where such a disclosure is mandatory.
On December 28 last year, Sebi had stated it would hold further discussions on the said proposal, which is now expected to be discussed by the regulator's board at a meeting later this month.
The proposal is likely to mandate listed companies to disclose to the stock exchanges about their loan defaults to banks and financial institutions, within one working day of such a miss.
Once implemented, the move would help investors take an informed decision at the earliest in cases of loan defaults by listed companies.
The proposal gains attention amid the alleged loan fraud of over Rs 12,000 crores at state-run Punjab National Bank (PNB) remaining undetected for years.
The transactions were carried out by diamantaires Nirav Modi and Mehul Choksi by allegedly acquiring fraudulent letters of undertaking (LoU) from PNB's Brady House branch in Mumbai to secure overseas credit from other Indian lenders.
Meanwhile, talking about alternative investment funds, Tyagi noted that AIFs should ensure good corporate governance practises.
He also said that while the regulator was robust the regulatory framework for AIFs were "liberal" and therefore some caution need to be exercised.
However, the regulator is not planning to bring in any checks and balances in this regard.