SEBI puts up mechanism to check qualified audit reports

Market regulator, SEBI, has put in place a mechanism to scrutinize the qualified audit reports to ensure more transparency in the process. In the last couple of years many companies submitted audit qualifications and got away easily, but now, SEBI will scrutinize these reports through a qualified audit report review committee, which will have members from the ICAI and stock exchanges, reports Sajeet Manghat of CNBC-TV18.

Under this process the listed companies will now have to submit their audit report in two forms, Form A and Form B depending upon the qualifications in the audit report and this would be reviewed by the committee and then it would further pass down to the ICAI Committee, Financial Reforms Reporting Board and then if required the SEBI will ask the listed companies to restate the accounts as per the recommendations of the ICAI. So, it is a further scrutiny of all the audit reports by SEBI and that will make life little tougher for some of the companies where the auditors have qualified as part of the audit.

In another move, the SEBI has now relaxed some norms in OFS guidelines like to have a minimum gap of two weeks between two OFS issuances. There is other relaxation in form of institutions putting in 100% margin money, now they can put in ad-hoc money and ad-hoc margin are subject to stock exchanges, and if they are putting in ad-hoc margin they won’t be allowed modify the bids.

SEBI has also allowed modification of bids in the OFS category where the indicative price will now be disclosed during the last 60 minutes instead of last 30 minutes earlier.

Measures like bringing down minimum issue below Rs 25 crores if that achieves the public share holding limit. So, all recommendations sent by the merchant bankers over the last past few months have been put into this new recommendations which are coming from SEBI and that would help companies achieve the public share holding norms. June 2013 is the deadline for companies and nearly 25,000 crores of issuances are expected to come into the market as result of that change.

(curtsey : money control)

Rupesh Yatesh Dalal
Head Research Department


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