The Securities and Exchange Board of India (Sebi) is considering
a set of new guidelines on the listing agreement, a document that companies or other issuers of shares and other instruments have to strictly follow on the stock markets.
These guidelines are targeted towards limiting violations of clauses 39 and 45 of the Listing Agreement and will be made public on Monday, November 18, Sebi chairman UK Sinha said on Friday.
Speaking at the CII National Council Meeting in Mumbai attended by a large gathering of industry leaders, Sinha said that 1100 listed
companies were found to be in violation of clause 35 of the listing agreement.
Clause 35 of the Listing Agreement requires listed entities to submit to the stock exchanges on a quarterly basis, a statement of its shareholding pattern providing details of shares held by promoter/promoter group and public and details of shares held against Depository Receipts.
Nine hundred companies were found to be in violation of clause 49, which deals with corporate governance norms, Sinha said. The new guidelines will propose a whole set of rules on how the regulator and the stock exchanges will look at these violations.
Stressing on Sebi's positive stance towards minority shareholders, Sinha said that India's regualtor is following a general trend in many countries abroad, including in the US and elsewhere, to tackle what he called increasing 'shareholder democracy'.
"All non-promoter shareholders are working together," Sinha said, adding that shareholder activism is aligning increasingly to institutional investors.
Sinha also said the Sebi is being urged by various agencies to restrict circulars to very special cases, and issue guidelines for most issues, so that the 'element of surprise' is low unless required.
CEOs of large corporations are vulnerable to shareholder activism as well, he said. "Companies being clean is not enough, even if the supply chain violates environmental or child labour norms, it is bringing about shareholder activism," he said.
Special 
