Mumbai: Market regulator SEBI on rejected a call from companies for leniency in mandatory appointment of independent directors.
The new Companies Act has limited the number of companies that an independent director can represent, besides limiting their term to 10 years or two consecutive terms. It has also been mandated to have at least one woman on the board of every listed company.
Corporates have demanded some leniency citing "difficulties" in identifying "qualified people" for the job.
Rejecting this argument, SEBI Chairman U K Sinha said: "It is sad. If we can't get 3,000 to 4,000 qualified independent directors, then let us not talk about 10 per cent growth. We don't have thousands of companies. We have just 5,000 listed companies, of which only 1,000 are actively traded."
"You cannot say that this country does not have even 3,000-5,000 qualified chartered accountants, bankers, doctors and engineers. If that is the case, we should not aspire to be the third largest economy and grow at 10 per cent," Sinha said.
He said many independent directors told him that new rules about appointment of independent directors are right and companies should not have been given six months to implement these rules.
With regard to SEBI's new guidelines to protect interests of minority shareholders, Sinha said the regulator has received a very positive response from international hedge funds.
He asked corporates to implement new guidelines which made it necessary for the SEBI to be informed about corporate structure changes upfront.