India Inc told to bare all non -event based information

“Non-events are as important as events. If a company has lost market share or if a particular technology used by a company has been rendered redundant, it has an impact on the company’s operation. So we are aiming to start a system whereby companies disclose such non event based information through an annual information memorandum and periodically update the prospectus filed by them at the time of IPOs,” said Prashant Saran, whole-time director, Sebi, while addressing the fourth annual investment conference organised by Morningstar India.

Under the clause 36 of the listing agreement, listed firms are required to disclose the details of all events, which will have a bearing on the performance or operations of the listed entity.

They are also required to disclose to the stock exchanges all price sensitive information like strikes, lock-outs, closure on account of power cuts and disruption of operations due to natural calamity among others.

“Investors have lost trust in the last decade and right now the imperative is to build trust and we have to build it assiduously. To build trust, we are reviewing Clause 36 of the listing agreement under which corporates have to disclose non-events. We found that disclosures are just fill in the blanks now,” Mr Saran added.

J.N. Gupta, the managing director of Stakeho-lders Empowerment Services, said that such disclosures would help investors in the secondary market take a very informed decision.

“Investors are part of the company and they have the same rights as those enjoyed by the promoters. Listed firms should be asked to disclose non-event based material information either periodically or annually so that investors are able to take an informed decision,” the managing director said.