Sebi to regulate all companies issuing shares

New companies Bill to ensure privately-held, unlisted companies can’t escape Sebi scrutiny. All registered companies, both listed and unlisted, which raise public funds through sale of shares will be answerable to the Securities and Exchange Board of India (Sebi). The new companies Bill, being formulated by the Ministry of Corporate Affairs, is expected to make it clear that privately-held and unlisted companies will not be allowed to escape Sebi scrutiny by claiming they are governed by the Registrar of Companies and the Companies Act, and not Sebi rules. The move is significant in view of the ongoing Sahara-Sebi litigation, where Sahara has maintained that Sebi has no power to probe fund-raising by two of its group firms — Sahara India Real Estate Corporation and Sahara Housing Investment Corporation — as they are not publicly listed. These companies were raising funds from the public through an optionally fully convertible debenture scheme, allegedly without conforming to disclosure and other investor protection norms.
Source : Business Standard