Mumbai, Feb 7: The directors of a company should be held jointly responsible along with the company for the payment of the listing fees, said the Dhanuka committee in a meeting held on Saturday. The committee met 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 neccessary shareholder permission and it should be well publicised so that all the investors are well informed about the delisting.
On compulsory delisting the committee has proposed that a company can be asked to delist from any stock exchange under certainconditions - if the auditor's accounts show losses for three years consequently and the networth stands reduced to less than 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 `disappears'.
The panel has also recommended that an advocate or chartered accountant may present his case before the officers of Sebi only with the neccessary permission from the authorities. This permission can be evoked if it is found that the advocate or chartered accountant has not exercised due delligence 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 are expected of such professionals.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
