E-Paper
HT This Day: Nov 17, 1960 -- Company gifts to party funds
Criticism of the Government’s reluctance to prohibit by law donations made by companies to political parties was made by all the main speakers of the Opposition in the Lok Sabha today when the House considered the Companies (Amendment) Bill.
Criticism of the Government’s reluctance to prohibit by law donations made by companies to political parties was made by all the main speakers of the Opposition in the Lok Sabha today when the House considered the Companies (Amendment) Bill.
Mr Asoka Mehta (PSP) made an appeal to the Commerce and Industry Minister, Mr Lal Bahadur Shastri, to take steps to put an end to a practice which, Mr Mehta felt, would strangle democracy.
Much the same point was made by Mr H. N. Mukherji (Comm.) who quoted Mr Justice Chagla’s description of the practice as “an evil.”
The strongest attack came from Mr M. R. Masani (Swatantra) who challenged the Government to set published in the newspapers the news of every donation to any political party. In a bitter reference to the Prime Minister’s characterization of the Swatantra Party as the projection of some capitalist group. Mr Masani said that the publication of such news would reveal that it was the Congress Party and Mr Nehru who were **the biggest capitalist stooges.”
A Congress member, Mr R. K. Gupta. also spoke along Opposition lines on this matter. On other aspects of the Bill. however, there were considerable differences in the basic approach of Opposition spokesmen. Mr Masani considered many provisions of the Bill a gross bureaucratic interference in the running of private companies.
Mr Mukherji felt that the Bill did not go far enough to check business malpractices. Mr Asoka Mehta suggested a quasi-public institution such as a National Investment Corporation to guide small investors.
Earlier. moving for consideration of the Bill as amended by the Select committee. Mr N. Kanungo, Commerce Minister, explained that out of 212 clauses in the original Bill, 11 have been omitted and 14 new clauses added. The provisions omitted contained minor amendments mostly relating to procedural matters which the Select Committee thought did not need any change.
Giving details of the more important new clauses. Mr Kanungo said that Clause 70 which empowers the Central Government to direct a special audit would be different in scope and content from the traditional audit of accounts of a company at the end of the year. Although the clause lays down that this special audit, when ordered, can be undertaken only by a qualified chartered accountant, he need not necessarily be the auditor of the company. His functions would be more like that of an inspector appointed to investigate the affairs of a company under the other provisions of the Companies Act than to those of a company auditor.
Clause 120. he said, had been added so that the prohibition in the Act that after August 15 no managing agency shall manage more than 10 companies at a time shall not be by-passed by the device of transferring the excess number to other managing agencies in the same group.
One new clause enhanced the punishment for the improper use of employees’ provident fund monies. Two clauses had been included to facilitate the work of official liquidators in connection with the liquidation of companies.
The other new provisions do not involve any significant issue of policy and are mostly either consequential. verbal or clarificatory or dealing with procedural matters.
