SEBI To Seek Details Of Depository Receipt Owners (03-Aug-2010)
Securities and Exchange Board of India (SEBI), in order to promote transparency in the issue of depository receipts (DR) and its ownership, is mulling over the idea of seeking details relating to the owners of the receipts.
The market regulator is of the opinion that the promoters of companies use instruments like DRs in order to keep an indirect control over their firms. The promoters issue these DRs to foreign investors for underlying equity shares of the domestic company which are deposited with a local custodian bank. The regulator wants that the list of these foreign investors should be disclosed to discourage rule-breakers from unlawful holdings.
Most companies in India refrain from revealing the details of DR owners which is against the clause 35 of the listing agreement,stating about the disclosures of the DR holders. Though, the current norms mandates the companies to disclose the details, it has not been followed judiciously by most companies who are against the set rules. So the SEBI has taken this decision to seek the details relating to the ultimate beneficiaries of the DRs issued by the Indian companies.
The SEBI also explained that the voting rights of the foreign depository receipts holders are limited by the clause in the “terms of issue†set by Indian companies. As per the “term of issue†the voting rights of the foreign depository receipts holders cannot trigger takeover norms.
Meanwhile, the holders of ADRs and GDRs were made on par with local investors last September by SEBI by redefining the term acquirer.
Top News Today
 Godrej Properties, Mumbai based real estate developer launched its new residential project Godrej Alpine in Mangalore. It aims to complete 499-apartment Godrej Alpine for occupation in 36 months. Godrej
 Mahindra & Mahindra, auto major has stopped the second phase of booking for its latest sports utility vehicle XUV500. It has received over 25,000 orders in a period of 10 days from January 25 to February
 Reliance Power, the Anil Ambani group company's 2,400-MW Samalkot plant in Andhra Pradesh is likely to be ready for electricity generation this fiscal. It will install six gas turbines at the plant having
|
International Stock News
 The US markets rose on Monday, sending the Dow industrials to their highest close since 2008, as Greece's government made progress on measures to secure international aid. Also, a Labor Department report
 The US markets made a mix closing on Thursday, as a drop in jobless claims fueled optimism about the economy and investors looked to the next day's employment report as the next indicator of the economic
 The US markets made a mixed closing on Tuesday, with the indices mostly slipping after US economic data failed to live up to expectation. The reports showed that American consumer confidence trailed estimates
|
|
|