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Sebi to alter delisting disclosure norm

BS Economy Bureau

The Securities and Exchange Board of India will amend the disclosure norms for companies opting to delist from stock exchanges or deciding to buyback their shares.

The regulator is likely to make it mandatory for such companies to inform it about their boards' resolutions within 48 hours.

The department of company affairs secretary V Dhall on Wednesday spoke to Sebi chairman D R Mehta and discussed the amendments to the existing disclosure clause that would be required in wake of the new buyback norms specified by the Third Companies Amendment Bill, 2001.

Top government officials told Business Standard that under the existing disclosure norms too, it is mandatory for companies to intimate Sebi about all significant board resolutions.

Mehta said, "Any material event has to be conveyed to the stock exchange." According to him, irrespective of whether the Bill has such a provision, companies are required to inform the stock exchanges of any buyback decision.

The amendment to the listing agreements to take care of the fresh disclosure norms would be made after the Companies Third Amendment Bill, 2001 gets the Parliament nod and is notified.

The Bill, which seeks to replace the buyback ordinance, would also boost the value of shares of companies which are trading on the stock exchanges below their book value.

Piloting the bill, the minister for law, justice and company affairs Arun Jaitley said this would help in the revival of the stock markets.

The Bill provides for reducing the time limit for issue of same kind of shares by a company from 24 months to 6 months and does away with the requirement for a company to hold a general meeting of shareholders and instead allows them the facility of going through a special resolution for buying back their shares from the markets.

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