SEBI gets suggestion to split top posts in listed companies, SCOPE opposes

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has received a suggestion for preventing the same individual from holding the position of chairman and managing director simultaneously in listed entities, but the Standing Conference of Public Enterprises (SCOPE) has opposed such a move, reports PTI.

"SEBI has received suggestions stating that the position of chairman and that of managing director/chief executive officer of the listed companies would be segregated," minister of state for finance Namo Narain Meena said in a written reply to the Rajya Sabha.

He said SCOPE has come out against such a change in the structure of public sector units.

"SCOPE has argued that since the public sector companies in India have been structured through the checks and balance systems of the Comptroller and Auditor General of India (CAG), Central Vigilance Commission (CVC), Government Audit and Committee on Public Undertakings, there is no need to separate the role of chairman and MD," Mr Meena said.

The minister's reply in the Upper House of Parliament comes amid speculation that SEBI has already 'proposed' to separate the role of chairman and MD/CEO of listed companies to prevent concentration of management powers with one individual.

A senior SCOPE official had earlier come out openly against any such 'proposal', which might lead to a major overhaul of the board structure in many of the listed firms.

There are about 8,000 listed companies in the country, including 44 state-owned ones.

Mr Meena, in his reply, added that according to SCOPE, any such decision to separate the two roles and alter the basic structure of organisations may affect the performance of PSUs.

Regarding the suggestion, he said that the Corporate Governance Voluntary Guidelines, 2009, brought out by the ministry of corporate affairs had sought a clear demarcation of the roles and responsibilities of the chairman and MD/CEO to promote a balance of power.

"Further requirement to segregate role of chairman and CEO is also prevalent in developed jurisdictions, including the USA, UK and France," Mr Meena added.


Prospect of wheat exports could be weighed: Commerce secretary

New Delhi: A day after food minister Sharad Pawar ruled out lifting ban on wheat exports, the commerce ministry today said the possibility of allowing exports could be weighed as the global prices are higher than locally reports PTI.

"As of now, yes, domestic prices are lower than the international prices; so the prospect of commercial exports exists," commerce secretary Rahul Khullar told reporters here today when asked if India would allow exports of the grain as the global prices are ruling high.

Last evening, Mr Pawar said there is no proposal to lift the ban on wheat exports even though the country has adequate stocks in government godowns and there is a shortage of space for storage, as it has to keep domestic prices in check.

The global price of wheat has gone up significantly after Russia, which supplies almost 11% of the world export, effected a ban on exports in the face of worst ever drought in 100 years and Ukraine said it was mulling quotas.

India, which produced a record of 80.71 million tonnes of wheat in the 2009-10 crop year ending June, surpassing 80.68 million tonnes output last year, had banned exports in early 2007 and made imports free of any duties to augment domestic availability.

The country had imported about seven million tonnes of wheat in 2006 and 2007 to meet its buffer stock requirement.

As on 1st July, government agencies have 33.5 million tonnes of wheat stock.


Tata Capital to set up subsidiary for infra finance

Kolkata: Tata Capital, a subsidiary of Tata Sons, is considering setting up a 100% subsidiary for providing infrastructure finance, reports PTI quoting a company official.

"We will set up a 100% infrastructure finance subsidiary by March 2011," managing director of Tata Capital Praveen Kadle said today. Presently, infrastructure financing activity was being done out of a division of Tata Capital.

In its first year of operations, Tata Capital had disbursed Rs4,000 crore towards infrastructure financing out of a total of Rs11,000 crore.

Mr Khadle said that the funds required for infrastructure financing would be raised in the right mix of external commercial borrowings and domestic debt.

Out of the Rs11,000 crore disbursed, Rs4,500 crore was towards commercial finance and Rs2,500 crore towards retail finance.

The company had clocked a net profit of Rs51 crore on a gross revenue of Rs1,379 crore. Tata Capital's capital base stood at Rs2,200 crore.

Mr Khadle said that the company would leverage the Tata brand to raise further capital from the market.

"We will be able to raise about Rs3,000 crore further from the market," he said.

 Mr Kadle said that Tata Capital would also enter the foreign exchange business soon.

He said that the company would apply for licenses and that the new venture was likely to take off by the third quarter of the current financial year.

Among the non-fund based activities of the non-banking financial company (NBFC), he said the company engaged in investment banking and wealth management.

Asked if the Tata group was keen to convert Tata Capital into a banking outfit, Mr Kadle said that it was 'too premature to comment on this'.

He said that Tata Capital was almost doing various banking activity except for accepting deposits.

Asked about the disbursement target for the current year, he said the company would add around Rs3,000 crore.

Mr Kadle said the capital adequacy of the company stood at 21.4% and net worth stood at Rs2,120 crore.

The company would also focus on rural finance, but was not entering into micro-finance, he pointed out.


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