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Market regulator Securities and Exchange Board of India plans to introduce disclosure requirements for unlisted companies that are part of a conglomerate.
While listed entities are subject to comprehensive disclosure requirements, the same levels of disclosures requirements are not applicable to unlisted companies. “There is a need to identify, monitor and manage the risks introduced into the securities market ecosystem by unlisted companies in a conglomerate with a complex set of listed and unlisted associates,” the regulator said in its annual report for 2022-23.
SEBI also plans to facilitate transparency of conglomerates by enhancing the group-level reporting of transactions. Disclosure of details of cross-holding and material financial transactions within the conglomerate may be mandated on an annual basis, the regulator said.
India’s top conglomerates include Reliance Industries, the Tata Group, Aditya Birla Group, Mahindra Group, Bajaj Group, Adani Group and L&T.
The Adani Group has recently come under the spotlight after a report published by Hindenburg Research alleging violations of minimum public shareholding and related party transaction norms as well as lapses in corporate governance standards. SEBI has been asked to file a status report with the Supreme Court of India on possible violations by August 14.
Separately, the regulator plans to come out with norms for dealing with unclaimed client funds. Brokers have to find out the whereabouts of the clients for the return of such funds. If the clients are not traceable, the unclaimed funds will be transferred to investor protection funds of stock exchanges.
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