Interacting with senior officials of public sector undertakings (PSUs) here, Tyagi said the regulator would have a dialogue with the government on compliance of these companies with certain regulations.
The idea is to ensure that listed companies follow some discipline and between public and private sector (companies) they follow the same rules, he said. His remarks assume significance amid suggestions from certain quarters that PSUs should be given more time to comply with the minimum public shareholding requirement. “To have differentiation between government PSUs and private companies may not be that easy. It may be perceived wrongly,” Tyagi said while responding to queries from the audience.
He was participating at an interactive session with CEOs and senior executives of PSUs organised by SCOPE. The Standing Conference of Public Enterprises (SCOPE) is the apex professional organisation representing central government public enterprises.
Taking a dim view of the absence of selection procedure for independent directors, Tyagi said many were part of “closed clubs” who are appointed at whims and fancies of companies’ promoters.
While stressing that corporate governance practices need to be improved, Tyagi said some people are quite serious when they take up the role of an independent director, but there are plenty who are just eager to join the board according to convenience. “There is no procedure for selection of independent directors. Many of them, they are in closed clubs, the same people getting nominated or appointed to the same boards.
“I was told some people said that the Companies Act, 2013 (rules) are so stringent that people can go to jail. My only question was that how many people have gone to jail,” the Sebi chairman asked. Further, he said independent directors have serious fiduciary responsibility to fulfil, while another issue was about audit committees. “In fact, in listed companies, the whole discipline is through audit committees and independent directors broadly... We found that (there is) much need for improvement,” he said. In many cases, independent directors are appointed and removed at whims and fancies of promoters of companies, he said.
The Uday Kotak committee, set up in June, has been requested them to give the report in four months so that “we (can) take a serious relook at what needs to be done to improve corporate governance,” Tyagi said. Norms pertaining to independent directors and women directors should be done in a timely manner for PSUs as well, he said. Tyagi also said he was “not happy” with the current state of affairs at credit rating agencies and would soon initiate a public discussion for a new set of norms for them. “We are bringing out a discussion paper within a month,” Tyagi said in reply to a question on how would Sebi deal with the situation if the rating agencies fail to adhere to the new set of stricter norms.
Tyagi also said the National Stock Exchange may have to re-file papers for its Rs10,000-crore IPO after addressing issues related to alleged preferential access given to some brokers