Capital markets regulator Sebi today said it is "disappointed" with company secretaries for lack of disclosures regarding actions taken by stock exchanges in secretarial audits of companies.
"I was rather disappointed to see that many of the secretarial audit reports did not report on the non-compliances pointed out by the stock exchanges," Sebi chairman Ajay Tyagi said addressing an Institute of Company Secretaries of India event here.
Pointing out to an analysis of secretarial audit reports undertaken by the National Stock Exchange recently, he said the shortcomings included not reporting penalties levied by stock exchanges and overlooking compliance and corporate action events like changes in capital schemes.
Reminding that the company secretaries have been entrusted with the responsibility of secretarial audit in practice, Tyagi said, "I would urge to further step up the quality of the secretarial audit especially for listed companies."
"Disclosure and reporting has become very important in recent years because of increased emphasis on corporate governance," he said.
Tyagi also elaborated on the regulator's other expectations from the secretarial audits, including submission of "quality" secretarial audit reports.
A company secretary should "keep the dignity of the profession high, he should adopt a substance over form approach focusing on the principles and promptly report non-compliance to demonstrate commitment to both good governance and financial management," he said.
Tyagi added that there is a need to imbibe a culture of ethics and values and look at things beyond compliance to laid down regulations.
"A culture of integrity will have to be developed that permeates all levels of operation. A stronger ethical culture will also strengthen investors' faith in capital markets," Tyagi said.
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