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Any extension given to a corporate entity by extending the debt instrument’s maturity needs to be considered a ‘default’ for the purpose of valuation, according to the Securities and Exchange Board of India (Sebi). The norm was laid out in a circular issued on Tuesday night, a day before Essel Group announced that lenders had granted it more time to repay its dues.
Earlier, Sebi Chairman Ajay Tyagi had stated that the regulator didn’t acknowledge ‘standstill’ agreements between mutual funds (MFs) and promoters. However, Sebi had not yet formally laid down norms to govern such arrangements.
Sources say the move
