Sebi asks listed cos to make disclosure on loans given to promoters in compliance report on corp governance

Markets regulator Sebi on Monday asked listed companies to make disclosure about loans and guarantees provided by them to promoter or any other entity controlled by them on a half-yearly basis in the compliance report on corporate governance.

The move is aimed at bringing transparency and strengthening disclosures about such loans and guarantees, the Securities and Exchange Board of India (Sebi) said in a circular.

The regulator has come out with a new disclosure format in this regard which will be effective from financial year 2021-22.

"In order to bring about transparency and to strengthen the disclosures around loans/ guarantees/comfort letters/ security provided by the listed entity, directly or indirectly to promoter/ promoter group entities or any other entity controlled by them, it has been decided to mandate such disclosures on a half yearly basis, in the compliance report on corporate governance," Sebi said.

Under the new format, any loan or any other form of debt advanced by the listed entity directly or indirectly to promoter, promoter group directors including relatives, key management personnels or any other entity controlled by them need to be disclosed, along with aggregate amount advanced during six months and balance outstanding at the end of six months.

In case of any guarantee or comfort letter provided by the listed entity in connection with any loan(s) or any other form of debt, Sebi said that the listed entity needs to make disclosure about aggregate amount of issuance during six months and balance outstanding at the end of six months, taking into account any invocation.

With regard to any security provided by the listed entity, they need to disclose about type of security, whether its cash or shares; aggregate value of security provided during six months and balance outstanding at the end of six month.