Following a circular from the market regulator, both BSE and NSE has asked all listed companies to strictly comply with corporate governance norms
Nudged by Securities and Exchange Board of India (SEBI) to step up their vigil against companies lacking good corporate governance practices, both BSE and National Stock Exchange (NSE) have asked all listed companies to ensure compliance in ‘letter and spirit’ to all relevant norms.
The latest directive by the two stock exchanges also comes ahead of a new Corporate Governance Code to be implemented by SEBI for all listed companies with effect from 1st October.
Last week, SEBI, in a strong-worded circular has asked bourses to step up and equip their monitoring framework to identify practices where certain companies were observed to have flouted listing agreement and other corporate governance rules, including those related to holding of annual general meetings (AGMs) of shareholders.
Taking forward SEBI’s directions, the NSE, in a circular, said “the companies are advised to ensure that the principles of corporate governance are followed in letter and spirit and comply with SEBI circular.”
In a separate circular, the BSE also asked the listed firms to “take note of the SEBI circular and comply accordingly.”
The SEBI had informed the stock exchanges that there had been cases when corporate groups with multiple listed companies have wrapped off various AGMs within time gaps of 15 minutes without giving enough discussion time to shareholders, numbering over a lakh.
“Such a practice affects the rights of investors to seek clarifications/hold discussions and prima-facie appears to be prejudicial to the interest of the investors,” SEBI had said in the circular to the stock exchanges.
There have been instances when multiple listed companies of a single corporate group held almost back to back AGMs on a single day with very short-duration time gaps.
The companies explain such practices by saying that their various listed companies mostly have common shareholders, while holding AGMs on single day and at single venue saves time and cost too.
As per norms, principles of corporate governance are to be mandatorily complied with by listed companies.
The COMPAT upheld an order passed by CCI, which had found NSE guilty of abusing its dominant market position in currency derivatives segment
The Competition Appellate Tribunal (COMPAT) on Tuesday upheld the directives passed by Competition Commission of India (CCI) against National Stock Exchange (NSE).
In June 2011, the CCI had imposed a penalty of Rs55.5 crore on NSE for 'abusing its dominant position in the currency derivative market by cross subsidising this segment of business from other segments where it enjoyed virtual monopoly'. MCX Stock Exchange (MCX-SX), in 2009 had filed a complaint alleging that NSE was indulging in unfair practices by waiving the transaction fee on currency derivatives.
Reacting on the COMPAT order, NSE said it would appeal against the decision. “NSE will appeal the order of COMPAT and we will do the needful after going through the detailed order. Whatever we have done was in the interest of the development of capital markets. A suitable review of the implications will be done in due course," the Exchange said in a statement.
In its order dated 23 June 2011, the CCI had imposed a Rs55.5 crore fine on NSE for abusing its dominant market position and asked the bourse to stop unfair trade practices like subsidising its services with a zero-price regime in the currency derivatives segment.
Imposing a penalty equivalent to 5% of the bourse's three-year average turnover, the CCI had said there was "a clear intention on the part of NSE to eliminate competitors in the relevant market".
The CCI order followed a months-long probe into the matter after a complaint from the NSE's younger rival, MCX-SX.
NSE, then challenged the CCI order before the COMPAT . During its first hearing in August 2011, the COMPAT granted a conditional stay on the Rs55.5 crore penalty order but asked the bourse to comply with the other directions of the fair-trade watchdog in this matter. The Tribunal also directed NSE to give an undertaking that it would have to pay the full penalty, along with interest at the rate of 9% per annum, if it loses the case.
The NSE and MCX-Stock Exchange (MCX-SX) had entered into currency derivatives trading in August 2008 and October 2008 respectively, followed by United Stock Exchange (USE) in 2010.
However, in November 2009, MCX-SX filed a complaint against NSE for abusing its dominant position and thus violating the Competition Act.
After a year-long probe, CCI found NSE guilty of anti-competition practices and penalised it for abusing its dominant market position.
Educational loan for staff hiked to Rs20 lakh @ 5%
While RBI is gearing up to play a key role in the grand plan to bring 150 million households into the formal financial system, RBI employees have obtained a nice fat ‘financial inclusion’ of their own.
Reserve Bank officials already enjoy the most generous perks among government employees, covering every conceivable personal expense including books, computers, gadgets, petrol expenses, in addition to generous travel allowances with few questions asked.
If this were not enough, their children were entitled to a hefty education loan of Rs10 lakh at a concessional rate of 5% to 8%. The central bank has recently doubled the limit for this concessional loan to Rs20 lakh at the same low interest. It is no surprise then that so many children of central bankers can afford a foreign education.
What is certainly a surprise is that so many of these children then end up working for Indian and foreign banks under RBI’s regulation. Is it any wonder that RBI has only recently begun to work on a consumer charter and it supervision remains rather ineffective?