SEBI chairman, Ajay Tyagi said that he has partly accepted the recommendation of Uday Kotak panel in which 40 accepted without modification and 15 with modification and referred to government and other department to consider. Some recommendations have rejected. The Committee was set up under the chairmanship of noted banker Uday Kotak for improving standard of listed companies.
The panel have given recommendation, which is accepted by SEBI also in meeting. The panel recommend that separation of post of CEO/MD and Chairperson position at listed companies, it will come into effect from 1 April, 2020 and it will be applicable on top 500 listed company in the terms of capital market.
These listed companies should have at least one woman independent director by 1 April, 2019 and this rule will be applicable for top 1000 listed company and effect from 1 April, 2020 and these firms should have at least six directors in the top 1000 listed company and come into effect from 1 April 2019 and in the top 2000 listed company by 1 April 2020.
Currently, an individual is allowed 10 directorships and it will be only up to 8 in the listed company by 1 April 2019 and it will be reduced to 7 from 1 April 2020. The board has also approved the eligibility criteria for Independent directors.
The companies will also disclose details about utilization of funds raised from Qualified Institutional Placement and preferential issues. The firms also have to disclose credentials of auditors, audit fee, the reason for the resignation of auditors as well as expertise and skills of director. Disclosure of related party transactions and related parties are permitted to vote against such transactions besides secretarial audit would be mandatory for listed company and their material unlisted subsidiaries.