The board meet is scheduled to be held on June 14.

At present, debenture trustees do not act as guarantors to debenture issuesof corporates, especially in the case of unsecured debentures.

Sources said that while Sebi has been monitoring cases of default bydebenture issuers, it has decided to go on the offensive by taking a strictline with them, as also with their trsutees.

According to sources, most of the corporates which had defaulted on theircommitments were either from the steel industry or the textile industry -both of which sectors are in difficult circumstances these days.

Sebi sources said that while the percentage of defaults was quite small - Rs373 crore worth of defaults as against Rs 25,000 crore worth of secureddebentures - still the rise in the number of default cases was a cause forconcern for the market regulator.

Sources said that in the face of rising complaints from debenture holdersthe next few weeks would see a series of actions being taken against thedefaulters while the trustees will also be held culpable for the defaults oftheir clients.

Top Sebi officials said that it would be very difficult for them to make thedefaulting companies pay up "because if they do not have the cash, thenthere is no way they can be forced." While they could have considerablefixed asets, most of these companies suffer from cash flow problems.

In fact sources indicated that a company, which gave indications of notbeing liquid, could be barred from issuing debentures, though this would bean extreme step.

In case an investor drags a company to court or if the company becomes aBIFR case, the situation is compounded as in either case the matter isliable to drag on for years.

Sebi action, so far, has been restricted to, following up with the companiesconcerned through correspondence. But things are expected to change in thefuture.

The board meeting is also expected to discuss the draft guidelines forventure capital funds which are on the verge of being finalised. The Sebiboard had approved the recommendations of the Chandrasekhar committee onventure capital funds as far back as in January.

The annnual accounts of Sebi are also expected to be discussed and finalisedsources said.