Amid raging boardroom battle between ousted chairman Cyrus Mistry and Tata Group companies, the country's two largest bourses — National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) — have written to some listed firms of Tata Group for a secretarial audit by their audit committees.
The exchanges would like to see whether these companies have adequate compliance with various norms or not, according to Mint. "The audit committees will check disclosures made by these firms to see whether they are adequate (or not)," the report said, quoting unnamed sources.
Secretarial audit, which was introduced in Companies Act 2013, is a process to check compliance of the company with various laws. It gives comfort to regulators, stakeholders and management regarding effectiveness of risk management, control and governance processes.
Reports had earlier suggested that Securities and Exchange Board of India (Sebi) had asked exchanges to tell listed Tata Group firms to conduct an audit after allegations regarding violations of corporate governance standards were raised by Cyrus P. Mistry, the ousted chairman of Tata Group. Meanwhile, the market regulator is itself examining whether the Tata companies have violated any provisions of the Sebi Act relating to listing and insider trading rules, the report said.
NSE has already written to Indian Hotels, Tata Motors, Tata Steel, Tata Power and Tata Teleservices (Maharashtra) Ltd. seeking clarifications after Mistry's letter to Tata Sons board was made public.
Tata Sons board ousted Mistry as Tata Group chairman on October 24 and appointed Ratan Tata as its interim chairman. Since then, ugly fights have ensued between the former chairman and group companies over issues of control in various firms.
