Sebi proposes listed companies disclose payment delays

NEW DELHI: Sebi on Monday proposed that listed companies have to disclose any delay or expected delay in payment related to their debt securities within 24 hours from occurrence of such an event. 

The proposal comes against the backdrop of various instances regarding non-compliance with listing norms by issuers of non-convertible debt securities (NCDs) or non-convertible redeemable preference shares (NCRPS). 

Besides, Sebi has received representations from various stakeholders flagging difficulties in complying with various provisions of Listing Obligations and Disclosure Requirement. 

The new proposals regarding NCDs and NCRPs are aimed at ensuring ease of compliance on the part of the issuers who have listed their debt securities, according to Sebi. In a consultation paper, Sebi has suggested that any delay or expected delay in payment of interest or dividend or principal amount as per the due date for these instruments should be disclosed by the listed entity as soon as reasonably possible. 

The disclosures should not be “later than 24 hours from occurrence of event or information”, it added. 

The disclosures should include details about nature of NCDs or NCRPS, periodic ratings obtained from credit rating agencies and status update with respect to reference to NCLT under the Insolvency and Bankruptcy Code. 

“The disclosure of information having bearing on performance/ operation of listed entity and/or price sensitive information needs a review because an event which may be material on its own need not necessarily be material event/information even though it may be price sensitive,” Sebi said in the consultation paper. 

At present, listed firms are required to make timely payment of interests and principal obligations with respect to the NCDs. 

Sebi has noted that listed companies are submitting certificates to the exchanges only when they have made timely payment of their debt obligations and not otherwise.