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MFs pushed as governance watchdog

Prodding mutual funds to act as conscience-keeper of listed firms, market regulator Securities and Exchange Board of India (SEBI) has asked them to inform investors on an urgent basis about their support or opposition to various business decisions of the companies.

india Updated: May 15, 2011 21:41 IST

Prodding mutual funds to act as conscience-keeper of listed firms, market regulator Securities and Exchange Board of India (SEBI) has asked them to inform investors on an urgent basis about their support or opposition to various business decisions of the companies.

The SEBI is of the view that the fear of a possible opposition by institutional investors like mutual funds being made public would force the companies to follow best corporate governance practices in their businesses.

At the same time, small investors would benefit from the knowledge of stance taken by mutual funds, in their capacity as major non-promoter shareholders of listed firms, on any business proposal made by the companies, an official said on condition of anonymity.