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Sebi to tighten listing, delisting norms

The Securities and Exchange Board of India, the nation's capital market regulator, on Friday spelt out a slew of market reform measures including a central listing authority, tighter delisting norms and tracking down of promoters of vanishing companies, to improve sentiment in the market which is slated to witness about 200 IPOs this fiscal.

"It is necessary that we have a first-entry-point screening of companies intending to raise funds from the market. The proposed central listing authority will look into listing agreements and carry out due diligence," Sebi chairman G N Bajpai said at a seminar in New Delhi.

He said the proposed authority, which would be different from the National Listing Authority being tried out in the UK, would be an autonomous body separate from the ambit of Sebi and having representation from stock exchanges.

Pointing to the need for tightening delisting norms, Bajpai said, "Entrepreneurs should not create a situation where investors cannot exit and nor get the profits of the wealth created by the company."

A Sebi committee was looking into the delisting norms and would submit a final report within weeks. "We are working very strongly on various issues including delisting norms for MNCs," he added.

Sebi expected the market to chin up this fiscal following the initial public offer of 200 companies, he said.

Bajpai said Sebi and the Department of Company Affairs are working together to track promoters of 225 vanishing companies, which raised funds from the capital market and then disappeared. Sebi is in touch with the police to track down the promoters.

''The companies have vanished but the people have not. Sebi and the Department of Company Affairs are taking steps to locate the promoters of these companies,'' Bajpai said.

Later, Bajpai told reporters that he had written a letter to the police in different states to track down the promoters, who have perpetrated frauds on the investing public.

The search and seizure powers, as being envisaged in the proposed amendments to the Sebi Act, would be used to protect investors with the ''least pain,'' Bajpai said.

The law, justice and company affairs ministry and the finance ministry have already resolved their differences and have agreed to empower Sebi with search and seizure powers.

The amendments will now be cleared by the Cabinet.

The market regulator is also initiating measures to implement the concept of corporate governance in letter and spirit. Through corporate governance, SEBI wants to ensure wealth creation, wealth management and wealth sharing.

It has asked a few credit rating agencies to work out some instrument for measuring the companies on the scale of corporate governance.

PTI & UNI

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