New Delhi, Oct 7 (IANS) For greater transparency in business, regulators and corporates cannot escape public scrutiny of their working, stock markets watchdog Sebi said on Friday.
“As mini states with vast powers, regulators cannot escape the scrutiny of their working while public accountability is extending to corporates from politicians and bureaucrats,” Securities and Exchange Board (Sebi) Chairman U.K. Sinha said at a trade body event here.
Delivering the 19th JRD Tata Memorial Lecture under the aegis of industry chamber Assocham, he told captains of industry and trade that it was imperative to decide whether there should be too many institutions to ensure accountability or expect more accountability from the institutions.
“Whenever a large episode of misconduct is detected, a perception gets built about a regulatory capture coming in the way of effective action,” he noted.
Citing the outcry on ponzi schemes, Sinha said empowering regulators with more powers would make them accountable to Parliament and public as well.
“In the course of our probes into the ponzi schemes, public interest litigations and criminal complaints were filed against us though courts played a commendable role, showing maturity and restraint,” he said.
Reminding corporates of the changing environment where there is more scrutiny, Sinha cautioned them against making exorbitant compensation to their chief executives even when making losses, as evident from such instances the world over.
“In the FTSE 100 companies, the CEO’s pay is 180 times more than the average pay of employees. In the US, the pay of a S & P (Standard & Poor’s) 500 CEO was 204 times more than the median pay of workers in 2015…,” he said.
FTSE 1200 is the index of the Financial Times Stock Exchange in London.
In the Indian context, he said the regulator had noticed and stopped small private firms being merged with listed companies at a huge valuation, primarily to provide gain to the promoters at the cost of other shareholders.
The Sebi chief also called for checks and balances to ensure that the very functioning of the regulators was not throttled in the guise of accountability.
Earlier, Associated Chambers of Commerce of India (Assocham) Chairman Sunil Kanoria stressed on the need for transparency in functioning of corporates.