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India markets regulator to look into compensation deals by PE firms

Friday, September 23, 2016 - 22:11

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India's capital markets regulator said on Friday it was considering mandating that listed companies owned by private equity (PE) firms seek shareholder approval when entering into performance-based compensation agreements with executives.

[PATALGANGA, India] India's capital markets regulator said on Friday it was considering mandating that listed companies owned by private equity (PE) firms seek shareholder approval when entering into performance-based compensation agreements with executives.

The Securities and Exchange Board of India (SEBI) said it had found instances of PE firms entering into such agreements with executives of companies into which they had invested without the approval of shareholders, adding "it could potentially lead to unfair practices."

The regulator will ask the public whether PE firms should disclose and seek approval from shareholders for existing and future compensation agreements, according to a statement issued at the conclusion of its quarterly board meeting.

Among other measures announced on Friday, SEBI said it would allow certain categories of foreign investors to directly access corporate bond markets without brokers, and eased rules for real estate investment trusts and infrastructure investment trusts.

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