Sebi asks CAs to be 'extra careful' while auditing listed SMEs

Mumbai: Sebi's whole-time member Ashwani Bhatia on Friday asked chartered accountants to be more diligent while auditing companies listed on the SME exchange platforms.

Addressing an industry event of CAs, Bhatia said it is important to look at the listed SMEs (Small and medium-sized enterprises) in a more careful way because the same companies will grow to be a part of the main board in the future.

"We have seen some challenges there (SME platform). We request you to be extra careful as far as SME IPOs and fundraising are concerned because these small companies will become much, much bigger going forward," the banker-turned-capital markets regulator said.

Bhatia expressed satisfaction with the progress of the SME platform, stating that Rs 14,000 crore has been raised by such entities, with Rs 6,000 crore being raised in FY24 alone.

He compared the CAs to "doctors", and added that they act as first-level regulators by ensuring orderly conduct of companies.

Bhatia said many Sebi investigations and orders, which take over a year to complete, may not be necessary at all if the CAs had done their work more diligently.

It can be noted that in March this year, Sebi chairperson Madhabi Puri Buch had flagged concerns around "price manipulation" in the SME platform listings and trading, and asked investors to be cautious.

Meanwhile, addressing CAs on Friday, Bhatia recalled the conduct of SBI's past chairman R K Talwar and said that the strength of character of the leader helps create "great institutions".

He also said that despite the regulator coming out with regulations to enable delisting, the experience has been the "reverse" with little interest on that front.

The whole-time member hinted that the low interest in delisting is due to high valuations, and added that even foreign companies are looking at listing in India.