Company Law Committee is likely to consider stronger regulations for bigger unlisted companies, CNBC-TV 18 reported on September 25 citing sources. The report also mentions that committee is considering higher levels of regulation for financial reporting for such companies.
It also stated that the panel may define meaning of 'bigger' companies and bring in stronger norms for such unlisted firms.
The latest move is triggered by irregularities at the ed-tech firm Byju’s where auditors resigned. Moreover, three board members tendered their resignations owing to differences with founder Byju Raveendran on key operational issues in the latest setback for India's most valued startup. G V Ravishankar of Sequoia Capital (now Peak XV Partners), Vivian Wu of Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus have resigned.
Sources also said that mandatory submission of quarterly statements by unlisted companies are being considered in order to check on the financial reports of major startups. Along with this, the committee is likely to take into account if more rigorous framework for bigger unlisted firms is needed.
Former SEBI Chairman Ajay Tyagi had called for corporate governance compliance review of mature startups.
The sources also added that inter-ministerial discussions on company's act amendments are taking place currently to bring tighter rules for unlisted large firms.
Meanwhile, to bring things on track for the embattled ed-tech company, Byju's recently stated that it has offered to repay the entire $1.2 billion term loan B (TLB) to its lenders in under six months, in a surprise move that will bring some cheer to the edtech giant.
The company has proposed repaying $300 million of the $1.2 billion loan in the next three months, contingent on lenders accepting its amendment proposal, a person with direct knowledge of the matter told Moneycontrol.
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