The Securities and Exchange Board of India is in talks with the department of company affairs for seeking power to regulate stock splits below a certain value, according to Sebi chairman M Damodaran.
Damodaran said as part of this, Sebi would encourage companies to declare dividends in absolute terms (in rupees) and not percentage terms, which often led to misinterpretations.
Addressing investors at an event organised by the Tamil Nadu Investors' Association yesterday, Damodaran said Sebi would set up an expert committee to be headed by a retired judge of the Supreme Court to look into the reallocation of shares under the recent multiple application IPO scam.
The committee will devise an optimum method to identify investors who have either lost out on buying of particular shares or those who have been allotted lesser percentage of shares than they ought to have been.
On Sebi Investor Education and Protection Fund, he said, "We have persuaded the government to pass this Bill in Parliament. We expect the Sebi Act to be amended in the coming session. Through this, the amount collected from fines and penalties of offences will not go into the Consolidated Fund of India, but will be channelised towards the Sebi Investor Education and Protection Fund."
In addition, an expert committee will also look into differentiating between serious and first-time offences.
Urging investors to raise questions on composition of boards of various companies before investing, Damodaran said, "Clause 49 provides only for numbers. Sebi cannot legislate human behaviour. Questions on boardroom compositions are hardly raised in India."
