Securities and Exchange Board of India (SEBI) has tightened listing norms for merged or demerged entities.

It is not rare that unscrupulous promoters take small investors for a ride. So there is indeed a need for stronger regulation for listed companies. As a step in that direction, the Securities and Exchange Board of India (SEBI) has tightened listing norms for merged or demerged entities. Here are a few revised norms. Prior to submission of the scheme for sanction from the High Court, a company would have to file the draft along with documents, with the stock exchanges. Moreover, it would be mandatory for such companies to obtain a valuation report from an independent chartered accountant. In addition, the company would also have to include the 'complaints report' in the notice to the shareholders while seeking approval. Also, the listed companies would have to ensure that the scheme provides for obtaining shareholders' approval through a special resolution passed through postal ballot and e-voting. This is surely a step in the right direction.