SEBI chief warns of global risks from US-Iran war
What's the story
Tuhin Kanta Pandey, the Chairman of the Securities and Exchange Board of India (SEBI), recently addressed the CII Corporate Governance Summit. He highlighted a number of challenges that businesses and regulators are facing today. These include rising tensions in West Asia disrupting oil and gas supplies, which could have a ripple effect on the global economy.
Tech challenges
AI's impact on operational boundaries
Pandey also stressed that artificial intelligence (AI) is pushing the operational boundaries of companies, government agencies, and regulators. He compared corporate governance to an organization's nervous system. He warned that companies with weak governance structures might look strong from the outside but are often slow to respond to internal and external pressures.
Governance improvements
Progress in strengthening governance frameworks
Despite these challenges, Pandey highlighted the progress made in strengthening governance frameworks and reducing information asymmetry. He emphasized the importance of independent directors in improving boardroom decision-making. The SEBI Chairman revealed that significant efforts are being made to enhance their skills and effectiveness for better corporate governance practices.
Regulatory changes
SEBI proposes to allow buybacks of shares through stock exchanges
In another development, SEBI has proposed to allow buybacks of shares through stock exchanges once again. The move comes after changes in the taxation framework. The mechanism was discontinued on April 1, 2025, over concerns regarding equitable treatment of shareholders and tax implications. Under the revised framework, buyback proceeds will be taxed as capital gains in shareholders' hands from April 1, 2026.