Companies bill to become law by fiscal-end: Secy
The Companies Act amendment bill, which was placed in Parliament last year, is expected to become law by the end of the current fiscal year. Law in needbusiness Updated: Sep 18, 2010 00:23 IST
The Companies Act amendment bill, which was placed in Parliament last year, is expected to become law by the end of the current fiscal year.
“The Parliamentary Standing Committee has given its recommendations and the ministry is looking into it,” said Secretary, Ministry of Corporate Affairs, R Bandopadyopadhyay. “By the next session of Parliament, the amended bill is expected to be tabled.”
He was addressing the 10th Global Leadership Programme at SCOPE on Friday.
Such a “major bill” would require some time to get passed, as it would go to the Law Ministry for vetting, he explained.
The report of the Parliamentary Standing Committee on Finance on the Companies Bill 2009 was submitted in Lok Sabha in August last year. The bill seeks to replace the Companies Act 1956 to bring in a greater transparency and more stringent corporate governance laws, in the wake of the Satyam Computers scandal.
The bill seeks to introduce the concept of class action suits for the first time in the country, to provide more power to investors in case of discrepancy and mismanagement. The bill also makes it mandatory for one-third of the board to be made up of independent directors, and provides for formation of a One Person Company.
The secretary said the government directors couldn't be treated as independent directors as they are nominees representing the government in its capacity as owner.
Welcoming disinvestment in public sector undertakings, Bandyopadhyay said it was a good idea and the objective of it should be clear. “The government won't do anything against the interest of public enterprises," he said.