The securities market regulator plans to seek details of the source of funds flowing through preferential allotment of shares, a move aimed at deterring promoters from pumping money indirectly through front entities. Two persons familiar with the matter told ET that the Securities and Exchange Board of India or Sebi's, move comes in the wake of increasing concerns over promoters or other investors channelising money into companies through complex structures involving interconnected entities. "Sebi wants to know who is investing through certain front entities," said one of the persons quoted earlier. The proposal was discussed by the 17-member Sebi Committee on Disclosures and Accounting Standards ( SCODA) on Friday.
Source: Economic Times
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