Mumbai: Waking up at the last moment, over 250 companies including Adani Power, Adani Ports, Essar Oil and GVK Power on Tuesday appointed women directors to meet the Sebi deadline of midnight tonight for having at least one female member on their boards.
The companies have, however, mostly appointed wives or daugthers of their promoters or top executives, while some have also replaced their independent directors with their female family members, mainly wives, daughters or sisters.
The numbers can rise further as board meetings were scheduled till late in the night to comply with the norms, which were first announced in February 2014 with an initial deadline of October 1, 2014. It was extended by 6 months.
Yesterday too, nearly 200 companies had made such appointments as part of last-minute rush that began late last week after a stern warning from the regulator.
Tomorrow onwards, the companies without a woman director may face penal action under the Sebi regulations, as also under the Companies Act, including monetary fines. While Sebi norms provide for penalty of up to Rs 25 crore, the penalty under the Companies Act can be from Rs 5,000 to Rs 5 lakh.
Sources said the stock exchanges were asked by Sebi to submit a compliance status tonight, while a final update would be provided tomorrow after taking into account late-night filings. Subsequently, Sebi will look into the final compliance status and begin the process for undertaking necessary action against the non-compliant companies.
Similar action would be initiated by the Corporate Affairs Ministry for non-compliance to the Companies Act provisions.
The companies are required to appoint women directors as per the new Corporate Governance regime ushered in by Sebi last year, which also included various measures with regard to independent directors and top management salaries to safeguard the interest of small investors.
Earlier, the new regime was applicable to all the listed firms. Sebi later exempted smaller companies -- those having equity share capital of up to Rs 10 crore and networth not exceeding Rs 25 crore, as also those listed on the SME platforms of the stock exchanges -- from the mandatory compliance "for the time being".
There are more than 5,000 companies listed on the BSE, while NSE has nearly 1,650 entities on its platform.
Till early evening, nearly 200 NSE-listed companies were yet to comply, while the number could be higher at the BSE.
However, nearly half the appointments made by the companies were of the persons from within the families of the promoters or top executives.
The companies that have decided to appoint women directors as independent members of their boards seem to have preferred bankers and chartered accountants, shows an analysis of the announcements made by listed firms in last few days.
A few companies, such as United Breweries Holdings Ltd, have opted for a foreign national to be appointed as a woman director, while many of them have decided to promote a senior management personnel to the board.
To meet the deadline, many firms are appointing the same women executives to boards of their various group companies.
Some companies have, however, expressed their inability to meet the deadline, while citing reasons ranging from a sudden exit of existing women directors to 'lack of quorum' in their board meetings to make an appointment.
Sebi has warned of strict penal action against the firms that fail to comply, while Chairman U K Sinha recently said it was "really shameful" that many companies were not being able to appoint even one woman director.
The companies which appointed women members on their boards as independent directors included Adani Power, Adani Ports and SEZ, Golden Tobacco, Prime Capital Market, Linc Pen and Plastics and Kohinoor Foods.
Other companies that announced appointments of women directors on Tuesday were GVK Power, Dhampure Specialty Sugars, Ashoka Buildcon, ABG Infralogistics, Surya Roshni Ltd, Bharati Shipyard, India Home Loan Ltd, Landmark Property, Donear Industries Ltd and Nitesh Estates.
Yesterday, at least 80 companies announced appointment of women directors as independent board members, while another 110 appointed non-independent female directors.
A person can serve as an independent director only on seven listed companies at a given time, while the ceiling for whole-time directors is three, as per Sebi norms.
Those having appointed independent women directors were DFM Foods, Parrys Sugar Industries, Shemaroo Entertainment, PTC India Financial Services, Ahluwalia Contracts, Kajaria Ceramics, Bartronics India, Unitech International, Chemfab Alkalis, Parsvnath Developers, Sujana Metal Products, KSK Energy Ventures, Sujana Universal Industries Ltd and Parenteral Drugs.
Such companies also included Ramco Industries, Bilpower, Panacea Biotec, HB Stockholdingsm Salora International, Jagran Prakashan, Hindustan Motors, Minda Corp, Anant Raj Ltd, Lanco Infratech, Sambhaav Media and Ramco Systems.
Others that appointed women directors yesterday are Aditya Birla Money, Bajaj Hindusthan Sugar, Amara Raja Batteries, Gujarat Natural Resources, BL Kashyap and Sons, Lovable Lingerie, ICSA India, Dalmia Bharat, Chambal Breweries, Kalyani Steels, DB Realty, McNally Bharat Engineering Company, Bafna Pharma, Sterling Holiday Resorts, Blue Dart Express, Kalpataru Power Transmission and Alstom T & D India.
"These women shall have the same voice as the promoter, defeating the very purpose of genuine (independent) gender diversity," Prime Database Managing Director Pranav Haldea said.
The past week saw over 50 listed firms, including Hero Motocorp, Bajaj Auto, Tata International and a host of small and mid-cap firms roping in female directors on their boards.
This was after a 'categorical' warning from Sinha to the companies that are found to be non-compliant.
"And I'm very categorical, if people do not follow it willingly, then it will have consequences. And the consequences will be as per law and can be very serious," the Sebi Chairman had said.
After Sebi's directive in February last year, many firms had stepped up efforts to have women directors on their Boards and nearly 500 female members were nominated till December 2014, although many of them happened to be family members of the promoters. These also included Reliance Industries, where chief Mukesh Ambani's wife Nita was named to the board.
Earlier this month, Sebi wrote to nearly 160 companies, out of the top-500 listed firms, after they were found to be non-compliant. Most of them responded to Sebi saying they were doing the needful to meet the deadline.