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SEBI bars wilful defaulters from market

Move assumes significance in the wake of a ranging controversy over Vijay Mallya

Policy Pulse
Publish Date: Mar 12 2016 3:19PM | Updated Date: Mar 14 2016 12:16PM

SEBI bars wilful defaulters from market

 Cracking its whip on 'wilful loan defaulters', markets regulator Sebi on Saturday decided to bar them from raising public funds through stocks and bonds as also from taking board positions at listed companies - a move that would disqualify beleaguered Vijay Mallya from various posts. 

 Besides, Sebi has also decided to bar such defaulters from setting up market intermediaries such as mutual funds and brokerage firms. 
 
The move assumes significance in the wake of a raging controversy over UB Group Chairman Vijay Mallya, who has exited the country amid continuing efforts by the banks to recover dues totalling over Rs 9,000 crore of unpaid loans and interest. 
 
Mallya recently resigned as Chairman and Director of United Spirits Ltd as part of a sweetheart deal with the company's new owner Diageo, a deal which itself is under Sebi's scanner. He, however, remains on board of various other companies including those from his UB Group as also a few others including Indian subsidiaries of some multinational companies. 
 
Addressing reporters after an important board meeting of Sebi, which was also addressed by Finance Minister Arun Jaitley, the regulator's Chairman U K Sinha said the new rules on restraining wilful defaulters would come into effect after they get notified. 
 
"After the notification, all the persons would stand disqualified from all positions at listed companies," Sinha said, but refused to comment on any individual. 
 
These restrictions would apply to every individual and company declared as wilful defaulter as per the Reserve Bank norms.