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September 11, 2007 17:35 IST
Market regulator Securities and Exchange Board of India initiated on Tuesday proceedings against 20 listed companies, including five public sector entities, for violating corporate governance regulations.
The regulator has started adjudication proceedings against the companies on the basis of quarterly reports received from stock exchanges regarding compliance with Clause 49 of the Listing Agreement that deals with corporate governance, a Sebi release said.
The market regulator, however, did not reveal the identity of the 20 companies. When contacted, a Sebi spokesperson also declined to give the names of the companies.
Sebi began proceedings against the five public sector companies for not appointing adequate number of independent directors on their board.
As per the Clause 49, at least one-third of the board of a listed company should comprise of independent directors if the chairman is a non-executive director. Otherwise, half of the board should comprise of independent directors.
As far as private sector firms are concerned, proceedings have been initiated against three companies for non-compliance with almost all major provisions of Clause 49 and against two companies for not constituting board or audit committees.
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