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Money > Business Headlines > Report April 17, 2002 | 1150 IST |
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'Poor governance has eroded investor confidence'BS Markets Bureau Poor corporate governance of several entities has eroded investor confidence, G N Bajpai, Chairman of the Securities and Exchange Board of India, said at a seminar on capital markets organised by the Federation of Indian Chamber of Commerce and Industry in Mumbai on Tuesday. Bajpai said that good corporate governance practices were being observed sketchily by many corporates and had to be enforced more forcefully. This is for the first time that Bajpai has directly attributed the lack of corporate governance for the erosion in investor confidence. Former Sebi chairman D R Mehta had spoken about corporate entities becoming powerful and hindering the process of putting in systems which would ensure safety in the markets. V K Dhall, secretary, department of company affairs, also came down on corporates saying some of their activities "leave something to be desired". He made the point that no amount of regulations would work unless the entities were made accountable. "Punishment is the only way to ensure compliance," he said. The DCA has set up a consultative committee, headed by Dhall, which will monitor events in the capital market and corporate sector. The panel comprises professionals including chartered accountants, company secretaries, brokers, investment bankers among others. Dhall also made it clear that powers to be delegated to Sebi was under the consideration of the finance ministry and once a consensus was arrived at, it would be put up for Cabinet approval. The first board meeting of Sebi, after Bajpai took over as its chairman, is scheduled for April 25. The new draft regulations of the takeover code are expected to be taken up at the board meeting as also the demutualisation and corporatisation of the bourses. It may be recalled that a panel was constituted to look into the proposed corporate structure of the exchanges and is scheduled to submit its report shortly. Sebi is also ready to launch its Edgar online-based real-time information system on an experimental basis in a month. Bajpai said the idea of introducing such a system was conceived nearly two years back but no work was actually done. ALSO READ:
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