SC Directions on Disclosure Norms Issue

The Supreme Court of India on 28 November 2010 ruled that all companies seeking exemption from disclosure norms before tapping the capital market can do so with the prior consent of market regulator Securities and Exchange Board of India (SEBI). The courts direction follows a petition filed by SEBI against the Securities Appellate Tribunal (SAT). SAT had on 7 August 2009, directed the Bombay Stock Exchange (BSE) to grant in-principle approval for the allotment and listing of shares issued by S Kumar's Nationwide Ltd to its promoters on a preferential basis, overruling the market regulator's earlier orders in this regard. The Supreme Court after studying the petition specified that such exemption for companies and individuals can only be given by the Securities and Exchange Board of India under the SEBI Act. Investors cannot be permitted by tribunal to deviate from the Disclosure and Investor Protection (DIP) guidelines of the market regulator.