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Market Watchdog to Act Tough Against Errants

Published: 31st March 2015 06:00 AM  |   Last Updated: 31st March 2015 07:42 AM   |  A+A-

MUMBAI: Securities and Exchange Board of India (Sebi) will come out very strongly against any company that violates laws, U K Sinha, chairman of Sebi said here on Monday.

He was speaking in reference to scores of companies that had still not met the requirement of appointing a woman director on their board by the end of March 31, 2015 despite a six month extension given by Sebi.

Sebi has wide powers and it would not hesitate to use them to protect investor’s interest, he said. He cited the instances of ordering arrests of three persons violating rules. Sinha said Sebi had enormous powers including for making recoveries. He cited the case of action against companies that tried to take undue advantage of long term capital gains. Such firms will not be spared.

Referring to low capital raising by companies, Sinha said the regulator was also making efforts to help raise awareness of companies and investors with regard to the capital market. In this regard he mentioned the rapid ascendance of India’s rank as a country that protects its investors, especially minority shareholders against the big powerful promoters.

India’s position in protecting investors and minority investors has improved to the seventh rank globally compared with 49 in 2012 and 34 in 2013, Sinha said citing a World Bank study.

“India has strengthened minority investor protections by requiring greater disclosure of conflicts of interest by board members, increasing the remedies available in case of prejudicial related-party transactions and introducing additional safeguards for shareholders of privately held companies,’’ a World Bank report had said about India last year.

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