MUMBAI, February 7: The directors of a company should be held jointly responsible along with the company for the payment of the listing fees, according to a proposal by the Dhanuka committee on delisting of shares from stock exchanges.The committee -- set up by the SEBI to solve the problem of delisting and related investor problems -- met today to finalise the working draft of the proposed Securities Act, 1998 which is a consolidation of the SEBI Act 1992 and the Securities and Contract Regulation Act, 1956. This provision will put the liability on the directors of a company if it defaults on the payment of the listing fees. In most of the cases, the company faces delisting procedures when it does not pay the listing fees to the exchange.
The committee has also proposed that a company cannot opt for voluntary delisting from any of the stock exchange unless it is able to garner the necessary shareholder permission and it should be well publicised so that all the investors are well informed about thedelisting.
On compulsory delisting the committee has proposed a company can be asked to delist from any stock exchange under certain conditions. These include if the auditor's accounts show losses for three years consequently and the networth stands reduced to below the paid up capital of the company.
Other than this it also includes the default of the company in complying with the provisions of the listing agreement of the exchange, breach of bye-laws of the exchange and also if the company officials disappears.
The panel has also recommended that an advocate or chartered accountant may present his case before the officers of SEBI with the necessary permission from the authorities. This permission can be revoked if it is found that the advocate or chartered accountant has not exercised due diligence or has submitted documents which are misleading or has done anything which is unethical.
The rationale behind this provision is to maintain certain standards of good behaviour which is expected of suchprofessionals. This has also been provided to hold the professionals responsible if in case of any misleading information in the offer document and they can be also pulled up for the same.
The proposed Securities Act has a separate chapter for listing and delisting, detailed provisions for investigations, enforcements and penalties.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
