Vedanta recently announced the appointment of former chief of SEBI UK Sinha as a Non-Executive Independent Director from March 13. Sinha, who earlier served as chairman of the Securities and Exchange Board of India from February 2011 to March 1, 2017, has been instrumental in ushering in key capital market reforms.
“Under his leadership, SEBI introduced significant regulatory amendments to the various Acts enhancing corporate governance and disclosure norms,” the company said while appointing him.
Navin Agarwal, Chairman, Vedanta, said: “We warmly welcome UK Sinha on the board. Sinha is an architect of strong regulatory regime for India’s capital markets. As a corporate with highest standards of corporate governance and ethics, we believe this will be a befitting association.”
Not just Sinha, former SEBI chiefs and members are on the boards of various other companies. M Damodaran, who was SEBI chairman between 2005 and 2008, is an Independent Director at Biocon and Hero MotoCorp; CB Bhave (2008-2011) is on the board of M&M Financial Services.
SEBI norm
There is nothing wrong in SEBI members getting into corporates. According to SEBI rules, a chairman or whole-time member should not accept any employment before the expiry of one year from the date of demitting office in SEBI, except with the previous sanction of the Central Government.
One should welcome these members, who know the rules and regulations very well, joining India Inc. No doubt, their advice can help the companies climb in the corporate governance index. However, SEBI chiefs and members should reveal their valuable recommendations relating to governance that help companies tone up their processes and disclosure standards to the exchanges and public, so that others can also emulate them.
As UK Sinha rightly said while accepting Vedanta’s offer, “In the current environment, with greater emphasis on disclosure and governance for corporate India, I am glad to contribute to Vedanta achieving greater levels in its corporate governance practices.”
Feedback notes
Ex-SEBI officials who take up corporate positions can also send feedback notes to SEBI in case of difficulty in implementing or following certain rules. That will also help the regulator become more pragmatic in framing regulations.