In a bid to bring in greater transparency and enhance accountability of India Inc, market regulator Securities and Exchange Board of India (SEBI) on Wednesday said it is working on an alternative model of corporate governance.
"A committee is working on it. We have also asked the MCA (Ministry of Corporate Affairs) to broaden the scope of section 55 of Companies Act 1956 which is now clause 22 of Companies Bill," SEBI Executive Director Usha Narayanan said at an Assocham event in New Delhi.
The alternative model of corporate governance will be designed in such a manner that it will suit the needs of Indian companies, she said adding the existing model is closer to international practice.
Corporate governance is maximising the shareholder value in a Corporation while ensuring fairness to all stakeholders, customers, employees, investors, and other stakeholders.
Corporate governance norms for listed and to-be-listed companies should be completely in Sebi's domain, she said.
Standing Committee on finance has also recognised the need for sectoral regulator having more stringent rules than what is contained in the parent Act that governs companies, she added.
Under the present system, unlisted companies are governed by the norms prescribed in the Companies Act, while listed companies follow Clause 49 of Sebi's Listing Agreement.
Regarding jurisdiction on end use of IPO funds, Narayanan said, it is completely in the domain of the MCA as SEBI deals with disclosures.
Besides, she said, the MCA also looks into it through its early warning system and exchanges provide the MCA with quarterly results, as and when required.
Former MCA director Manoj Arora said, "It is above all the responsibility of the shareholders to question whether their money has been duly utilised".
Further, Narayanan said that Sebi is working on creating a unified platform which will enable companies to file their financial reports on just one platform.
"The reports will then be passed on to various exchanges. Companies would not need to file reports with different exchanges separately," she said.
