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April 26, 2001
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Money > Business Headlines > Report April 26, 2001 |
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Sebi may be empowered to bar dubious promotersAshwin J Punnen The Centre is likely to provide a set of powers to the Securities and Exchange Board of India including the right to prohibit dubious individuals from raising funds from the market and action against companies failing to abide by the regulator's diktat. A government-appointed committee to suggest ways to streamline investor protection mechanism has in its report recommended that the regulator be further empowered by bringing all security market related regulations under it including those overlapping powers vested with the Department of Company Affairs. The committee headed by professor Mitra, former head of the National Law School Bangalore, in its report submitted that the government suggested a separate investor protection regulation and called for empowerment of consumer forum to give compensation to defrauded investors. It also suggested setting up an Investor Protection Fund under the regulator. Listing out various powers needed for Sebi to perform as a effective markets regulator, the committee said that it should able to prohibit any undesirable person from entering the markets to raise funds. At present, the market regulator has no powers to stall anybody from raising funds from market except seeking for disclosures relating to various issues. The matter came up into sharp focus during the public issue of Tips Industries as the promoter of the company was an accused in a sensational murder case. The committee suggested amendments to various Acts including the Sebi Act, Securities Contract Regulation Act and the Companies Act. The panel also said that Section 11B of Sebi Act should be further strengthened so that the regulator could take action against companies or market participants who are not obeying its directions or orders. In order to enhance the regulator's investigation powers, the panel also called for search and seizure rights to Sebi and more penalties to be enforced against erring companies. Sources said the government is examining the recommendations made by the panel and also amendments sought by Sebi and will soon come out a bill seeking various amendments. Powered by YOU MAY ALSO WANT TO READ:
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