After getting mutual funds to reveal their voting details on resolutions of companies in which they hold considerable stake, capital markets regulator Sebi now wants to extend the same disclosure policy to insurers and has requested the sectoral watchdog Irda to make them do so.
"Sebi has spoken to Irda and has requested it to facilitate implementation of disclosure of voting policy in company resolutions by insurers so that interests of small shareholders are safeguarded," Chairman U K Sinha said.
"We have also requested Irda to ask insurers to disclose their voting track record on their websites," he said in a conference on corporate governance.
Explaining the rationale behind this, Sinha said this is important from the perspective of lIC, which is the largest domestic institutional investor holding significant stakes in all leading corporates like RIl, l&T, ITC and state-run and private sector banks, among others. It can be noted that Sebi on March 25 this year issued strict disclosure norms to MFs and had asked them to explain the rationale behind exercising their voting rights in companies, as part of a long-term policy for the industry effective from April 1, 2014.
It had also asked them to make monthly disclosures about assets managed by them. Both the measures are aimed at protecting interests of small shareholders.The first-ever long-term policy for over Rs 10 lakh crore mutual fund industry was aimed to make it an attractive investment proposition for retail investors.
This would include monthly disclosure of AUMs from different categories of schemes, AUMs from places beyond top 15 cities, contribution of sponsor and its associates in AUMs, contribution from different types of investors (retail, corporate etc), state-wise contribution and AUM from sponsor group or non-sponsor group distributors.
Besides, the data have to put on a consolidated basis on website of the Association of Mutual Funds of India within seven working days of the month.
The Sebi had also said MFs should disclose the rationale while exercising their voting rights in investee companies. "Asset management companies shall be required to record and disclose specific rationale supporting their voting decision (for, against or abstain) with respect to each vote proposal," Sebi had said.
Reacting to TVS Group chief Venu Srinivasan's remarks inmedia last week that Sebi had become a dragon and the new Companies Act is draconian, Sinha said Sebi is neither a dragon nor an activist.On Srinivasan’s criticism of the Companies Act, he said the new Act was passed in 2013 after 10 years of consultations with all the stakeholders.
He further said he does not understand why the same entities that did not see any problem with the Bill when it was being drafted are now picking holes in the same within a year.On charges that Sebi is being an activist on e-voting of resolutions, Sinha said the days of three AGMs being conducted in 30 minutes are over. "Stakeholders do not tolerate mis-governance any more. And it is not possible for every shareholder to be physically present at an AGM and e-voting solves this problem.
"Corporate India should not treat corporate governance as an undue burden but see this as in their own interest. long-term growth will come only if they take care of all stakeholders."On matters of abusive related-party transactions, he said Sebi cannot keep quiet and said the regulator is building safeguards and will continue to do so if required.