The recent circular from the Security and Exchange Board of India’s (SEBI) streamlining and enhancing disclosures of material events is aimed at adding ‘more’ transparency and improving the timelines of corporate disclosures. Furthermore, the disclosure requirements have been extended to include shareholder agreements including family settlements “to the extent that (these) impacts management and control of the listed entity.” This notification also expects that with effect from 1 October 2023, India’s top 100 listed entities will confirm, deny, or clarify market rumours on the stock exchanges.
Till case law is established, the new regulations will be a major point of friction between companies and regulators and aggravate intra promoter rivalries. Till then the best test for boards to apply is whether the disclosure of any event or development will make the company more attractive or less attractive to investors or leave its value unchanged.
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