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Penalties for Cos Violating Board Quota

Published: 21st March 2015 06:00 AM  |   Last Updated: 21st March 2015 05:01 AM   |  A+A-

MUMBAI : Securities and Exchange Board of India chairman, U K Sinha on Friday cautioned companies of penalty if they are unable to appoint even one woman as a director on their boards by the mandated March 31 deadline.

“I find it very shameful in this country about 8,000 or 9,000 listed companies can’t find even one woman who is competent enough to be on their board. This is very shameful,’’ Sinha said. SEBI had in February last year directed that companies must appoint at least one woman director on their board by October 1, 2014. The directive was later relaxed to April 1, 2015. Yet, SEBI found that even the top listed companies have not been able to comply with their requirement.

Up to December last year, about 500 women had been appointed to the board though many of whom were family members of the promoters of these companies.

“Any requirement, including the requirement of a woman director, is something which has to be enforced,’’ Sinha told reporters on the sidelines on an event here. “I am very categorical. If people do not follow it willingly then it will have consequences.’’ Sinha reminded the instance of asking companies to ensure at least 25 per cent public shareholding. The regulator acts against companies that violate the rules.

About a third of the top 500 listed companies have still not met this requirement and the regulator also proactively wrote to several companies.

Earlier this week, the Minister of State for Finance, Jayant Sinha said that the market watchdog will take necessary action against companies that don’t meet the minimum requirement. On its part the regulator has even tapped the Ministry of Corporate Affairs as also the Institute of Company Secretaries of India to ask its members and various stakeholders to ensure the regulation.


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