Sebi seeks standardisation of disclosures in public offer documents

Question: Many companies that are listed on the stock market in India have under their umbrella unlisted companies, which are closely held by promoters of the listed company. The information in respect of the private companies is not available to shareholders of listed companies. Are any steps being taken to ensure that there is complete transparency in operations of listed companies with their private entities?

ANSWER: At present private companies are not required to make disclosures pertaining to their financials. The regulations only apply to public companies which are listed on the stock exchanges of India. The Securities & Exchange Board of India in its annual report has stated that there is a need to identify, monitor and manage the risks in the case of a conglomerate comprising of a listed company and unlisted private companies and entities in which promoters of the listed company are interested. Therefore, Sebi has suggested standardisation of disclosures in public offer documents published by a company at the time of the initial public offering (IPO). This is being done to enhance transparency through reporting of transactions at a conglomerate level. The promoter group of the listed company will need to disclose cross holdings in private companies as well as in other listed companies.

Question: A lot of personal data is being collected by different entities for providing services, like hotels, airlines, etc. It is found that sometimes this personal data is misused and even provided to third parties. Are any steps being taken by the Indian Government to protect personal data and prevent its misuse?

ANSWER: A new legislation has been introduced in Parliament which sets out the guidelines for handling sensitive consumer information. The law also requires that the information collected should be removed or deleted once the task is performed or the services are rendered. The legislation mandates that companies and other entities should not ask for details of their customers which are not necessary to provide them with services. Illustrations have been given in the legislation to clarify its intent. For example, if a visa service company collects information from its customers who apply for a visa, the applicants have to provide bank statements, salary slips and other vital documents which are often submitted in digitised form. The legislation makes it compulsory for these visa service companies to destroy the information as soon as the visa has been processed. The same rule applies to websites that handle hotel bookings or issue airline tickets. In all such cases, the information and data will have to be deleted under the new legislation once the services are rendered.

Question: My brother residing in Mumbai is a real estate agent. He informed me that he is required to undergo training which is being conducted by the Real Estate Regulatory Authority (Rera). Is this training necessary as he has been in this profession for the past several years?

ANSWER: The Maharashtra Real Estate Regulatory Authority conducts training sessions for real estate agents with a view to protect the interests of buyers of residential properties who are very often not familiar with legal and technical issues. Hence, certification courses are being conducted by Rera. The training of real estate agents is undertaken to ensure that all information is provided to the prospective home buyer. The facts which have to be provided by the agent to the home buyer pertain to the carpet area measurement, floor rise amount, parking rules, possession related queries, etc. The Authority is also training site surveyors who, after completion of their training, are deployed in various cities and towns. The primary job of these surveyors is to visit the construction sites regularly and physically check if the details mentioned in the quarterly progress reports of developers uploaded by them on the Rerawebsite match with the ground realities, namely, the progress of the construction.

• Business