Sebi to come out soon with disclosure norms
The proposed guidelines would prescribe the disclosure to be made prior to the resolution process.
MUMBAI: Market regulator Sebi will soon come out with new disclosure guidelines for companies undergoing the corporate insolvency resolution process (CIRP). The new guidelines have been necessitated due to fundamental change in the management and governance of a listed entity during and after insolvency process.
Sebi has already issued a discussion paper on the matter seeking public feedback on whether to put restrictions on trading in shares, obligations of resolution professional during the proceedings, reclassification of promoters in the event of their holding comes down and related party transactions.
The proposed guidelines would prescribe the disclosure to be made prior to the resolution process, during the resolution proceedings before the tribunal and post CIRP stage.
During the resolution process, the regulator is considering whether to impose any fetters on the transferability of shares of listed corporate debtor as continued trading would depend on such companies meeting the listing standards of the stock exchanges.
The guidelines also requires a corporate debtor to make disclosures regarding any public announcement ordered by NCLT, invitation of claims by interim resolution professional, confirmation of interim resolution professional by the committee of creditors (CoC) and intimation of meetings of COC among others.
Sebi is also discussing whether to exempt the corporate debtor from seeking shareholders approval for any related party transactions if such transactions are part of the resolution plan approved by NCLT.