![\"SEBI\"](\"https:\/\/www.ygovernance.com\/wp-content\/uploads\/2025\/11\/5427a4d9-1402-4804-8761-e41fbf0957fa-1024x768.jpg\")
<\/figure>\n<\/div>\n\n\n
The Issue:
What happens if a\u00a0Private Limited Company\u00a0has listed its debt securities and qualifies as an HVDLE?
Until March 31, 2025, HVDLEs were required to follow the corporate governance requirements in Chapter IV of the LODR Regulations on a \u201ccomply or explain\u201d basis. However, on March 27, 2025, SEBI amended Regulation 15, mandating HVDLEs to comply with Regulations 16 to 27. This has caused some confusion in the industry about which regulations apply to private limited companies that qualify as HVDLEs but have only listed debt securities.
While many corporate governance requirements in Regulations 16\u201327 and Chapter VA are similar, there are differing views among professionals:
– Some believe such companies must comply with both Regulations 16\u201327 and Chapter VA, as regulation 15 also states applicability of corporate governance requirements for HVDLE.
– Others argue that only Regulations 16\u201327 apply.
– I believe that a private limited company, which has listed only its NCDs and qualifies as an HVDLE, should follow the corporate governance requirements outlined in Chapter VA.
Why Chapter VA?
Explanation 5 to Regulation 15(1A) of the LODR Regulations clarifies: \u201cIn case a \u2018high value debt listed entity\u2019 has its specified securities listed, it shall comply with the provisions of regulation 15 to regulation 27 of these regulations.\u201d This implies that if a company has only listed NCDs and qualifies as an HVDLE, it should follow Chapter VA. Applying Regulations 16\u201327 in this case may not be necessary, as Chapter VA provides tailored guidelines for HVDLEs. (In my view)
Implications for Private Limited Companies
If a private limited company has listed its NCDs and qualifies as an HVDLE, it must:
Restructure its Board of Directors to meet Chapter VA requirements.
Form committees as prescribed, such as audit committees.
Ensure Compliance with requirement for related party transactions, secretarial audits and so forth.
Conclusion
The applicability of Chapter VA is straightforward. It applies to companies that have listed only NCDs and qualify as HVDLEs. For such private limited companies, adhering to Chapter VA\u2019s corporate governance requirements is logical and aligns with SEBI\u2019s intent to provide specific guidelines for HVDLEs.<\/p>\n\n\n\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
On 27th March 2025, SEBI introduced Chapter VA (along with other amendments) in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (\u201cLODR Regulations\u201d). This chapter lays down corporate governance…<\/p>\n","protected":false},"author":3,"featured_media":81,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[7,6,9,8],"class_list":["post-79","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-chapter-va-of-sebi-lodr-regulation-2015","tag-corporate-governance","tag-independent-directors","tag-sebi-lodr-regulation-2015"],"_links":{"self":[{"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/posts\/79","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/comments?post=79"}],"version-history":[{"count":2,"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/posts\/79\/revisions"}],"predecessor-version":[{"id":82,"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/posts\/79\/revisions\/82"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/media\/81"}],"wp:attachment":[{"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/media?parent=79"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/categories?post=79"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ygovernance.com\/index.php\/wp-json\/wp\/v2\/tags?post=79"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}