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Corporates must disclose investment by subsidiaries: Sebi

The Securities and Exchange Board of India will soon make it mandatory for listed companies to disclose investments by their subsidiaries and associates in shares of the parent company.

"The market regulator will soon issue an order to insert this provision in the corporate governance code," Sebi sources said in Mumbai on Friday.

The listed companies would have to disclose this information as part of quarterly reports sent to the stock exchanges, they added.

Earlier addressing the corporate governance conference, Sebi chairman D R Mehta said investigations by the market regulator had revealed that many corporates had set up subsidiaries through elaborate structure to make investments in their own shares.

Some restrictions could be prescribed on number of subsidiaries that listed companies could set up, he said.

Sebi has also requested Department of Company Affairs on the possibility of disclosing investments of shell entities floated by companies, Mehta added.

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