Sebi Chief Ajay Tyagi pulled up credit rating agencies' (CRAs) for not giving adequate warnings about companies defaulting on redeeming corporate bonds. The comments come within days of the capital markets watchdog tightening disclosure norms for the CRAs amid concerns about delayed rating action regarding debt-ridden firms.

Sebi said it will soon initiate public discussion for new norms to govern their functioning. "We are not happy with the current state of affairs at the credit rating agencies. We are bringing out a discussion paper within a month," Tyagi disclosed.

He said the regulator will consult all stakeholders before making a decision. Ratings agencies said they are illequipped to conduct monthly reviews, required under the stricter norms, in the absence of adequate time to beef up their employee strength.

Tyagi also said corporate governance practices of listed companies require an overhaul, saying that most companies' independent directors are part of closed clubs and are appointed at the whims and fancies of promoters.

"The same people are getting nominated or appointed to the same boards. ... I was told that the Companies Act, 2013, is so stringent that people can go to jail. How many people have gone to jail?" said the Sebi chairman.

Many independent directors are just eager to join the board as per convenience in the absence of a proper selection procedure, he added. Sebi was also critical of the low representation of women on the boards of public sector enterprises.

"Twenty per cent of public sector companies still don't have a single woman director," Tyagi pointed out. As per rules, listed companies are required to have at least one woman director on their boards.