Clipped from: https://www.financialexpress.com/market/government-wants-sebi-to-review-corp-governance-norms/2438513/
The government’s focus isn’t just limited to penal action against the guilty. It wants swift remedial measures to ensure that investors’ confidence in the regulatory mechanism for bourses isn’t shaken by the crisis, he added
Commenting on the nature of the crisis, one of the sources said at least four aspects of it require due consideration of the authorities
The government wants capital markets regulator Sebi to review various corporate governance and investor protection norms meant for stock exchanges and plug any loophole to prevent a repeat of crises like the one at National Stock Exchange, an official source told FE. The government’s focus isn’t just limited to penal action against the guilty. It wants swift remedial measures to ensure that investors’ confidence in the regulatory mechanism for bourses isn’t shaken by the crisis, he added.
But this would require “much more than mere virtue signalling”, said another source who had worked at a senior position with a financial sector regulator. “The finance & corporate affairs ministry has been in talks with Sebi on this issue. It’s clear that the government wants current norms to be re-examined and corrective actions taken where there is a scope for improvement. Sebi keeps issuing rules to strengthen corporate governance and investor protection mechanism and many more may come soon as a result of this crisis,” said the official source cited above.
NSE plunged into a fresh crisis last week after a Sebi report suggested that the bourse’s former chief Ramakrishna took instructions from an unnamed ‘Himalayan yogi’ through emails on crucial matters — including organisational structure, financial projections, business plans, agenda of the board meeting and even ratings/performance appraisals of employees—between 2014 and 2016. The report also suggests that she appointed Anand Subramanian as NSE’s CSO in 2013 with a fat compensation of `1.3 crore, allegedly following emails by the ‘yogi’. The regulator has also accused Ramkrishna and Subramanian of running a money-making scheme at the NSE.
Commenting on the nature of the crisis, one of the sources said at least four aspects of it require due consideration of the authorities. “First, the role of senior NSE executives, including Ramakrishna, in the irregularities; second, the failure of the NSE board in detecting the wrongdoing; third, the potential role of any senior officials of the regulator or the government in this; and fourth, the remedial action that is required to be taken by the regulator to ensure it doesn’t happen in any of the bourses (for both stocks and commodities),” said one of the sources.
What also raised eyebrows was the fact that the NSE allowed Ramkrishna to resign without taking any action against her and its strange decision to let her laptop to be destroyed as e-waste, thus potentially erasing crucial pieces of evidence, including the IP address of the ‘yogi’.
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