Mumbai, March 21, 2018

A phased rollout of corporate governance norms suggested by the Uday Kotak committee, disclosure of debt default by listed companies and structuring of a pension scheme of its employees are on top of the agenda for the SEBI board meeting on March 28.

In the wake of the PNB loan scam and subsequent instances of companies trying to delay default disclosure, SEBI is considering a proposal to force corporate borrowers to report all defaults above Rs.5 crore if repayment is delayed by over 30 days, two people aware of the matter said.

In August, SEBI had made it mandatory for companies to disclose any instance of a default on the payment of interest or repayment of principal to banks or financial institutions within a day of the default. The regulator had said that while current regulations required listed companies to disclose delay or default in payment of interest/principal on debt securities, there was no such requirement when loans were taken from banks or financial institutions. But the norms were changed after they were introduced, mainly on fears of an adverse stock market impact.

The 23-member committee under the chairmanship of Uday Kotak had submitted its 177-page report to SEBI in October.

Among other things, the panel proposed that audit committees should monitor the flow of funds to unlisted subsidiaries, including those established overseas, and that listed entities should put in place a proper regulatory framework while sharing unpublished price-sensitive information with promoters or any other significant shareholders.

It also proposed that listed companies be required to have at least six directors on the board with a minimum of 50 per cent representation of independent directors, including one woman director.

[The Hindu Business Line]