Sebi Cracks Down On Firms Delaying Transfer Of Shares

The Securities and Exchange Board of India (Sebi) has initiated a crackdown on corporates delaying share transfers on flimsy grounds.

It has issued show-cause notices to six companies and is also planning to begin talks with corporates to streamline the process. The markets watchdog plans to pick top companies at random to force them to follow the guidelines in this regard.

We will talk to the corporates. Some of the larger ones will be picked up at random, and scrutinised on the share transfer aspect. If they are found to be continuing to default, we will prosecute them, a top Sebi official said yesterday. The Chandrasekharan committee on share transfers had also completed its work and would soon submit its report, the official said.

 

Primary market rules

Sebi will soon put in place some of the key recommendations of the Primary Markets Advisory Committee. To this end, the Sebi board is slated to discuss pricing of employees stock option shares on Wednesday.

It will decide whether preferential allotment norms should continue to apply to such shares, or should such shares be priced at their book value.

The board will also discuss the possibility of allowing issuers to bring in funds for a capital issue till 60 days after its closure.

While the relaxations to the carryforward conditions may be taken up for discussion, the chances of any major changes on this front are bleak, since it is unlikely that Sebi chairman D R Mehta, who was a major mover of the Patel committee recommendations, will stick his neck out a second time round.

Sebi is also confident of a spurt in Japanese foreign institutional investor interest in India following the visit of a Sebi delegation led by Mehta to Japan and Hong Kong.

Sebi officials said a major Japanese institution may register as an FII for the first time ever. A major Japanese broking house may also set up shop in India very soon, they added.