Mumbai: In a move to safeguard investor interest, the Securities and Exchange Board of India (Sebi) on Thursday asked listed and unlisted companies getting merged to appoint an independent merchant banker each for giving a fairness opinion on the valuation done by valuers.
“The listed company as well as the unlisted company, which are getting merged, shall each be required to appoint an independent merchant banker for giving a fairness opinion on the valuation done by valuers,” said the Sebi note.
PLUGGING HOLES
Sebi modifies Clause 41 of the listing agreement to bring more efficiency in the disclosure of financial results
Brings in changes to Sebi (Disclosures and Investor Protection) guidelines and the listing agreement to reduce the time duration for rights issues
Says all listed companies, in addition to submitting quarterly and year to date standalone results within one month of the end of the quarter, may also submit consolidated results within two months from the end of the quarter |
The fairness opinion shall be made available to the shareholders at the time of approving the resolution under Clause 24 of the listing agreement. Earlier, bankers involved in the merger of listed and unlisted companies had to submit a certificate to the stock exchanges, stating the fair valuation of the deal. However, Sebi has now mandated that each of the companies must appoint an independent banker.
The regulator has also modified clause 41 of the listing agreement to bring more efficiency in the disclosure of financial results. It has also modified the Sebi (Disclosures and Investor Protection) guidelines and the listing agreement to reduce the time duration for a rights issue.
Sebi chief C B Bhave had hinted at these changes in the press briefing after the board meeting in August. As per the amended guidelines, a listed entity, in addition to submitting quarterly and year to date standalone financial results within one month of the end of the quarter, may also submit consolidated financial results to the stock exchange within two months from the end of the quarter.
A listed entity, which opts to submit consolidated financial results in addition to standalone results to the stock exchanges, shall publish only consolidated financial results. These amendments will be effective from the second quarter of the current financial year, while the other amendments will come into effect immediately.
Further, a listed entity must place the limited review report on unaudited financial results before its board of directors/committee prior to submission to stock exchanges only if the variation between the unaudited financials and the amended financials after the limited review for that period exceeds 10 per cent, Sebi said.
The limited review report must be submitted for the last quarter also, in case the listed entity chooses to place unaudited financial results for that quarter (instead of submitting the audited financial results for the entire financial year within three months of the end of a financial year).
