In the light of PNB scam and other financial fraud issues, the Stock Exchange Board of India ( SEBI ) is likely to punish Chartered accountants, company secretaries, cost accountants and valuers. According to a new set of norms being considered by Sebi, these professionals may have to forfeit their fees and face penalties if they are found lacking in their dealings with listed firms.
As per reports, a senior official said that Sebi is looking to enhance the oversight to check such frauds with new regulations for fiduciaries in the securities markets. It will require additional disclosure requirements and greater scrutiny of financial statements by auditors and other third party entities, he said.
Sebi may finalise draft rules as per which the responsibility of getting a Firm to comply with securities regulations and act in the interests of shareholders will be on the professionals like chartered accountants, company secretaries, cost accountants, valuers and monitoring agencies. If such entities are found lacking in their dealings, Sebi may disgorge the wrongful gains, including the fee earned, along with an interest of 12 per cent per annum from the date of default, a report said.
Besides, the regulator may ask them not to directly or indirectly issue any certificate or report. Also, it may refer the case Institute of Company Secretaries of India (ICSI) or Institute of Chartered Accountants of India (ICAI) or any other other appropriate authority. Further, Sebi may issue warning, launch adjudication proceedings and initiate prosecution against the entities for any default.
“One of the prime objectives of Sebi is to ensure that there should be full, timely and accurate disclosure of financial results and other information that is material to investors’ decision,” he said, pointing to alleged lapses at various levels in cases like WhatsApp leak of financial results, the PNB scam and the matters concerning Fortis and Satyam-PwC.
Presently, entities such as merchant bankers, rating agencies, custodians, debenture trustees and registrar to public issues are registered with the capital markets regulator under specific regulations, professionals like practising chartered accountants and company secretaries, cost accountants, valuers and monitoring agencies are not registered with Sebi.