Sebi chairman Ajay Tyagi not pleased with quality of secretarial audits

Securities and Exchange Board of India (Sebi) chairman Ajay Tyagi has pulled up company secretaries for lapses in the secretarial audits of listed firms. 

Speaking at an event organised by the Institute of Company Secretaries of India (ICSI) on Friday, Tyagi expressed concern over the quality of secretarial audits at listed companies. 

“I was rather disappointed to see that many of the (secretarial) audits did not report the non-compliances pointed out by the stock exchanges. They did not report penalties levied by stock exchanges. Company secretaries need to further step up the audit quality, especially for listed companies,” he said.

Tyagi urged company secretaries to improve the quality of audits and preserve the dignity of the profession.

This criticism comes at a time when the market regulator has been stepping up punishments for non-compliance with listing and disclosure norms. 

In March, the Sebi had empowered stock exchanges to freeze shareholding of promoters in companies that fail to comply with listing regulations. The regulator had, in recent times, also increased the monetary penalties for non-compliance of listing regulations.

Tyagi also emphasised on the importance of ethics for improving corporate governance standards. “No matter how many regulations you create, corporate governance boils down to ethics,” he said.  Sebi had recently adopted several recommendations made by the Uday Kotak-led committee on corporate governance.