BackSebi to review corporate laws for transparency
Sebi to review corporate laws for transparency
PremiumMumbai: Sebi will examine if there is a need to tweak existing regulations to enhance compliance, transparency and efficiency in the corporate system in the light of the Satyam scandal.
“Over the medium-term, we need to decide (if) any tweaking of regulations is needed to put in place an enhanced level of compliance, transparency and efficiency," Sebi chairman C B Bhave said at a CII conclave in Mumbai on Thursday.
The regulator was conscious of the aberrations in the corporate governance standards in the country but “there is a need to avoid temptations to come to any quick conclusions in such cases about systemic stability," he said.
“SEBI is conscious of this (Satyam-like cases) and is determined to see that we play our part... we have to avoid the temptation to come to any quick conclusions," he said.
While SEBI was always prepared to face the challenges that may arise anytime, its preference was to encourage companies to comply with corporate governance standards on their own.
“The preference is not to legislate too many things but (instead) encourage companies to make some efforts on their part to ensure that they comply with corporate governance standards," Bhave said.
On Satyam, the Sebi chairman said that the regulators had responded swiftly to the scandal and the challenge now was to ensure that the culprits were brought to book in a time-bound manner.
“While the initial response of the regulators to the Satyam case has been swift, the speed and efficiency of the on-going investigation and ensuring that the culprits are booked in a time-bound manner posed a challenge," Bhave said.
On the issue of auditors, Bhave said that the regulator was exploring the desirability of asking listed companies to ensure the practice of rotation of auditors.
Sebi was also mulling the option of making it mandatory for listed companies to appoint an external agency to execute their internal auditing work to ensure transparency and better efficiency in their accounts, he said.
Other issues that need to be debated include the role of non-promoter shareholders in listed companies and ensuring the efficiency of independent directors, Bhave said.
The regulator has also initiated the process to implement the peer review mechanism for Nifty and Sensex companies and some randomly-chosen non-listed companies.
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