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April 30, 2001
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Money > Business Headlines > Report April 30, 2001 |
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Sebi should be manned by professionals: CII presidentBhupesh Bhandari The number of people clamouring for a revamp of the Securities and Exchange Board of India is growing by the day. The latest to join the chorus is the new president of the Confederation of Indian Industry, Sanjiv Goenka. "On the lines of the Securities and Exchange Commission of the US, Sebi should be manned by people who are trained to take on this role," Goenka said. Commenting on the recent payments crisis and price manipulation in the stock markets, Goenka said Sebi needed to act with greater speed and more transparency. To address this problem, CII is setting up a national task force on capital markets to identify loopholes and problems in the stock markets and suggest wide-ranging changes to bring about transparency and confidence. The task force will submit its report within two months. "This is the only way you can hope to revive the primary market," Goenka added. In addition, Goenka said that he wanted changes in Sebi's takeover code. "The unrealistic creeping acquisition limit should not be there," Goenka said commenting on the five per cent annual limit imposed by Sebi on promoters who want to increase their stake in their companies. If the limit is breached, a promoter has to make an open offer for at least 20 per cent of the company's shares. "A raider triggers off the takeover code at 15 per cent and a promoter at five per cent. This is unfair. A promoter should be allowed to raise his stake to 51 per cent freely. It is a major concern and I shall take it up with the right authority," Goenka added. The CII president also said that in such companies where domestic financial institutions have acquired stake through conversion of loans into equity, the institutions should offer the shares to the promoters first in case they want to sell out. "If they have picked up the shares from the market, then they can sell it to the highest bidder. But not in companies where they were partners in development," he said. On the Dabhol Power Company controversy, Goenka said that the Godbole Committee lays the foundation for a viable re-negotiation of the Power Purchase Agreement between the company and the Maharashtra State Electricity Board. Powered by YOU MAY ALSO WANT TO READ:
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