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K.R. Srivats

NEW DELHI, April 8

THE Y.H. Malegam Committee on disclosure requirements in the offer document is in favour of a "panel approach" to the matter of disallowing capital market issues by companies associated with persons having questionable track record.

"The broad consensus among the members is in favour of the establishment of an expert panel which will take decisions on the cases referred to them by the regulator. The panel will judge the company's suitability for tapping the capital market and then convey or recommend to the Securities and Exchange Board of India (SEBI) as to whether the issue can be allowed or not," sources said.

The recommendation for a "panel approach" is expected to form part of the report that the committee would submit to the capital markets regulator in the coming weeks.

The committee, which met on Friday last, was also understood to have taken a view that there was no need for having a statement of reconciliation between the US GAAP and Indian GAAP in the offer document, in cases where financial statements of the issuer company had been prepared on the basis of both the accounting principles. A view had earlier been expressed that there should be a statement of reconciliation showing increase/decrease in material aspects such as revenues/profits etc.

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