Corporates carry clout, but Sebi stands firm: Sinha

MUMBAI: Often at the receiving end of the companies for its penal actions and ‘tough’ regulations, markets watchdog Sebi has said the corporates carry a lot of clout and keep testing its resolve, but the regulator has always been firm on its ground.

At the same time, it is always “generous” and open to reasonable suggestions from the corporates, Sebi chief U K Sinha said, but regretted the fact that companies often come out with such “suggestions” after new regulations have already been framed.

Among others, such suggestions have been made by the corporates in cases like new norms for minimum public holding and delisting, while there have been voices of discomfort in the industry on requirements for minimum one woman director on the boards of listed companies.

Besides, the new insider trading norms of Sebi have also been criticized in some quarters, with Biocon chief Kiran Mazumdar Shaw going to the extent of calling the new regulation ‘draconian’. Some industry leaders had earlier said that Sebi was like a ‘dragon’.

“You see, what happens is that the corporates generally keep testing you. They test your resolve. They test how serious you are and how determined you are. And, they obviously have lot of clout in the country as a class,” the Sebi Chairman said.

“What Sebi has been doing for last several years is to have a very effective consultation process. My feedback is that in the consultation process, often they do not take enough interest.

“If they had taken interest and come out with things which are reasonable, Sebi can easily accommodate them. After something is done, then the voices are raised.

“For us it becomes a problem because since we have already taken a decision, how should we change it,” he said.

Sinha further said that Sebi has still been “quite generous and willing to accept genuine demands” even if it has been raised at a later stage.

“However, if a demand has been raised at a later stage, then we have to again follow a process and it becomes an entirely new process and therefore it takes time,” he said.-PTI