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Informist, Thursday, Aug. 28, 2025

 

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--SEBI official: Cos must disclose information frequently to all shrholders
--CONTEXT: SEBI Chief General Manager Dangeti's comments at FICCI conference
--SEBI official: Some disclosures by cos only in letter, not in spirit
--SEBI official: Onus of corporate governance also on promoter-less cos
--SEBI official: Cos' disclosures must not leave a lot to imagination

 

By Rajesh Gajra

 

NEW DELHI – The Securities and Exchange Board of India wants listed companies to ensure their disclosures under the listing regulations are clear and comprehensive, given that some of these leave a lot to imagination, Chief General Manager Rajesh Dangeti said Thursday at a conference on corporate governance organised by the Federation of Indian Chambers of Commerce and Industry here.

 

Dangeti said when one goes through disclosures made by listed companies to stock exchanges, "we find, yes, in letter there is a disclosure but in spirit whether there is a disclosure" is open to debate.

 

"You get to see a lot of disclosures where probably it leaves a lot to imagination," the SEBI official said. Dangeti asked listed companies to address the question of what they should do to "instil more confidence" among investors. He said he was posing such questions to the listed companies as "a lot is being asked from SEBI in terms of ease of doing business."

 

Corporate governance is also about how the listed companies "ensure that information is given not only frequently but fairly, and in a manner which is easily understood by the investors," Dangeti said. The quality of disclosures must be such that the information "being given is given without...anything...being hidden back by the companies", he added.

 

Such cases are not easy to spot on the face of the disclosures, he said. Only when an investigation happens and one goes deep into the disclosures as part of the probe, SEBI or exchanges find out that the disclosures could have been made in a "much better way, in a much clearer way", Dangeti said.

 

The SEBI official said stock exchanges have also started seeking clarity from companies on disclosure of receipt of orders. If a company says it has received an order from a particular company, and if that order-awarding company is also listed, the latter is also asked to confirm or deny it through a separate disclosure.

 

Talking about the role of promoters, the SEBI official said they may provide the vision, resources, and direction, but the company exists in its own right with its obligations to regulators, creditors, employees, investors, and shareholders. "How do you ensure that there is parity in information being shared?" Dangeti asked. If any one party, or one person, is privy to information inside a company, it should be made available to all shareholders.

 

The SEBI official also pointed to the changing nature of the corporate world in terms of companies not having identifiable promoters. Dangeti said the onus of good corporate governance does not change for a company just because it does not have an identifiable promoter.

 

National Financial Reporting Authority Chairman Nitin Gupta said at the FICCI conference that how the management looks at risks, finance functions, and internal audit occupies a central stage in corporate governance. A transparent and trustworthy financial reporting framework is a critical component of the corporate governance framework, he said.

 

Gupta said unless internal controls are strong, comprehensive, and effective, "what we see outside (in terms of financial reporting) may not be a truthful depiction." The NFRA chairman said it had come across several cases of use and diversion of funds for vested interests. He said rules regarding related party transactions are essential for sound corporate governance.   End

 

Edited by Tanima Banerjee

 

 

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