InvestorQ : What are the new norms proposed by SEBI to make the delisting process more transparent and improve disclosures?
Dia Deshpande made post

What are the new norms proposed by SEBI to make the delisting process more transparent and improve disclosures?

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Sam Eswaran answered.
1 week ago
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Last week, the SEBI made a series of proposals to make delisting simpler and more transparent. Clearly, this appeared to be triggered by the Vedanta fiasco where the delisting had to be ultimately called off. It had then emerged that Vedanta had claimed successful delisting based on interim data rather than full data.

The failure of the Vedanta delisting plan was also a signal that some more fundamental changes were required in the delisting process to make it more transparent and meaningful. This spurred the regulator to look at serious changes in the delisting methodology and process as well as the requirements for the companies to adhere to.

A key area to improve is the disclosure aspect. For example, in the last two years the delisting value was a fraction of the proposed delisting. That is a narrative story of the flawed delisting process. Companies have to only disclose the floor price but now they will be required to disclose indicative price too; the ballpark price promoters are willing to pay.

If you look back at Vedanta, the problems arose when the LIC demanded price turned out to be 4 times the price offered by Vedanta. SEBI suggests independent director report on the delisting proposal be disclosed along with broad voting pattern of independent directors. Also, time lines have been compressed with companies needing to disclose on same day.

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