February 2011
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Sebi wants tighter norms for some deals

The departing chairman of the Securities and Exchange Board of India (Sebi), C.B. Bhave, proposed changes in key areas related to the capital market, 10 days before the end of his three-year term. In a bid to bring in more transparency in deals between group companies, Sebi will propose that the ministry of corporate affairs tighten norms for all interested parties, including promoters, in such deals. The market regulator said it will recommend to the ministry the amendment of a clause of the Companies Bill, 2009, to prevent interested shareholders from voting on the special resolution of the prescribed related party transaction. The definition of interested party will cover the promoters of companies, Bhave said, while addressing the last board meeting of his tenure that ends on 17 February. The board discussed some of the issues that had arisen out of the earnings fraud at Satyam Computer Services Ltd. Investors won’t be allowed to vote on resolutions that involve a conflict of interest. “The issue arose when Maytas was proposed to be amalgamated with Satyam. Though the transaction did not materialize eventually, the matter originated from there,” said Bhave. [...]