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DCA to issue guidelines for unlisted companies

Department of Company Affairs will come out shortly with guidelines for unlisted Indian companies on issues like preferential allotment, sweat equity and employee stock option plans and has constituted a 12-member committee for the purpose.

The committee is scheduled to submit its recommendations to the DCA by the first week of September after which the department will notify the guidelines under Section 79 (A) of the Companies Act.

The committee, headed by J M Verma of Indian Institute of Management, also has a nominee of Securities and Exchange Board of India, official sources said in New Delhi, adding Sebi already regulates these issues for all listed companies and its input would be vital in the case of unlisted ones.

Other members of the committee include a nominee of the Reserve Bank of India, two each from the Institute of Chartered Accountants of India and the ministry of commerce, besides DCA officials.

DCA has already been consulting Sebi for amending the pricing and other norms governing preferential allotment of shares by managements of listed companies after several irregularities were found in such allotments.

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