Prevent interested parties from voting: Sebi to MCA
Feb. 7: In its last major decisions under the leadership of Mr C.B. Bhave, Sebi on Monday tightened the noose around erring market players, promoters and investors, while streamlining the public offer bidding process and grant of licences.
But a decision was elusive at a Sebi board meeting on revising rules for company takeovers as also for new regulations for the way stock exchanges are owned and do business.
The regulator decided to bring in a greater oversight on brokers, mutual funds, bankers and other market entities by limiting their initial licence to five years and said it would be renewed into a permanent one based on their track record.
The move would also save the market intermediaries the pain of seeking renewals every year.
The decisions were taken at the Sebi board meeting under the chairmanship of Bhave, whose term ends on February 17. He would be succeeded by Mr U.K. Sinha, head of fund house UTI AMC and chairman of the mutual fund industry body Amfi. Sebi also decided to suggest to the government to put in place checks to avoid incidents like the Satyam accounting scandal being repeated.
In this regard, Sebi said that it would suggest the ministry of corporate affairs to put in place a clause in the new Companies Bill to bar any investors, including promoters, from voting on any matters where they have an interest.
In the Satyam case, the board members, including the nominees of the promoters, had decided to acquire two companies — Maytas Infra and Maytas Properties — promoted by the family members of Raju family, the promoters of the IT firm.
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