This will enable accuracy in counting of votes, elimination of postal ballots getting lost in transit and sufficient time for shareholders to vote till the end of voting period. In the recent court-convened meeting for the merger of Sesa Goa and Sterlite, a large number of votes were found invalid.
In order to enhance the quality of financial reporting done by listed entities, Sebi has decided to put place a mechanism to process qualified annual audit reports filed by the listed entities with stock exchanges and annual audit reports where accounting irregularities have been pointed out by Financial Reporting Review Board of the Institute of Chartered Accountants of India (ICAI-FRRB).
It has decided that deficiencies in the present process would be examined and rectified. Sebi would create Qualified Audit Report Review committee (QARC) represented by ICAI, stock exchanges etc to guide the market regulator in processing audit reports where auditors have given qualified audit reports.
Cases where the qualifications are significant and explanation given by the company is unsatisfactory would be referred to the ICAI-FRRB. If ICAI-FRRB opines that the qualification is justified, Sebi may mandate a restatement of the accounts of the entity and require the entity to inform the same to the shareholders by making the announcement to stock exchanges.
In order to harmonise the Sebi (ICDR) Regulations relating to the infrastructure sector with the amended Securities Contracts (Regulation) Rules, 1957, it has decided to carry out consequential amendments to ICDR Regulations pertaining to minimum public shareholding and minimum subscription requirements. Sebi has decided to modify the minimum subscription requirements for companies coming out with IPOs to state that the minimum subscription will not be less than 90 per cent of the offer, subject to allotment of minimum 25 per cent or 10 per cent, as the case may be, of the securities offered to the public.
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