The Hindu Business Line : Simpler delisting norms for small cos in 6 months

The Securities and Exchange Board of India (SEBI) Chairman, Mr M. Damodaran, said on Wednesday that a simpler exit route for such companies would be evolved in the next six months.

"We are working on this and there will be good news for you in six months time," Mr Damodaran said in response to a query at the Confederation of Indian Industry (CII) annual session here today.

Small listed companies have been seeking a simple and an inexpensive delisting mechanism. They have been complaining that the cost of compliance was going up in recent years and the delisting process was also getting expensive.

The SEBI Chairman also indicated that the capital market regulator might move away from the current system of reverse book building for small listed companies.

"We are looking for an alternative to the reverse book building process, which is being seen as a costly and difficult mechanism," Mr Damodaran told presspersons on the sidelines of the CII annual session here.

He, however, parried questions on whether SEBI intends to define a small company in terms of market capitalisation, turnover or net worth. "We have six months to decide on this," Mr Damodaran said.

On Clause 49 of the listing agreement, the SEBI chief made it clear that the capital market regulator expects "total compliance" to this clause by December 31.

Stating that the Clause 49 lays down the minimum standards, Mr Damodaran also held that complying with the requirements does not mean that the company concerned adopted good corporate governance.

"I do not want corporate chiefs to just focus on the arithmetic of corporate governance. There are certain non-quantitative values also," he said.

Mr Damodaran also held that 80 per cent of the problems on corporate governance would get sorted out if corporates were to address the important issue of constitution of boards correctly.

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