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Mr G.N. Bajpai, SEBI chief, talking to presspersons at the Hyderabad Stock Exchange on Thursday.

HYDERABAD, Aug. 29

THE Securities and Exchange Board of India (SEBI) has sought the services of two of the leading credit rating agencies in the country - Credit Rating Information Services of India Ltd (Crisil) and Investment Information and Credit Rating Agency (ICRA) - to prepare a comprehensive instrument for rating the good corporate governance practices of listed companies.

This instrument will enable the securities market regulator judge the compliance status of corporates on parameters such as effective creation, management and distribution of investors' wealth, according to the SEBI Chairman, Mr G.N. Bajpai.

Talking to presspersons here on Thursday, the SEBI Chairman said the corporate governance framework currently under usage in the country was not serving the objectives of optimum creation, management and distribution of wealth.

Stating that the issue of disproportionate distribution of wealth also needs to be addressed at the earliest, Mr Bajpai said intellectual dishonesty was proving more disastrous than financial dishonesty, while citing the example of Arthur Andersen.

According to him, the damage that resulted out of financial dishonesty can be addressed while it might take more than couple of generations to compensate the damage caused by intellectual dishonesty.

SEBI expects to receive the recommendations of Crisil and ICRA on corporate governance rating instrument in a couple of months and implement them at the earliest, Mr Bajpai said.

Seeking suggestions from various corners of the society, the market regulator has placed on its Web site the detailed recommendations submitted by the Justice H. Kania Committee on `Corporatisation and demutualisation of stock exchanges in India.'

Stating that the Malegam Committee report on `Disclosure standards and accounting practices' was also placed on the Web site, Mr Bajpai said SEBI would pass its directions on the recommendations after taking into account the suggestions.

The regulator would shortly decide on the proposals submitted by the Pratip Kar Committee on delisting of shares by MNCs from the Indian bourses.

According to Mr Bajpai, T+1 settlement cycle was the objective to be achieved by 2004. This objective consists of three major milestones - straight through processing, T+2 settlement and the real time gross settlement (RTGS) mechanism, involving the money market regulator and the banking industry.

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