Corporate Affairs Minister Veerappa Moily on Monday said the Companies Bill 2009, which promises greater shareholder democracy and stricter corporate governance norms, will be brought before Parliament for consideration and passage in the monsoon sesssion. “End of this week, as far as we are concerned, we will finalise the Cabinet note and by next week we will move it. Comments from all ministries have come. Now, we will take it forward and possibly if Cabinet approves it, we will be able to bring it in the monsoon session,” said Moily. The new Companies Bill, which was tabled in the backdrop of the Rs 14,000 crore-Satyam fraud, promises greater shareholder democracy and stricter corporate governance norms.
The Bill proposes introduction of the concept of class action suits for the first time in India, which would empower investors to sue a company for “oppression and mismanagement” and claim damages.
Among other things, it also proposes to tighten the laws for raising money from the public.
The Bill also seeks to prohibit insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.
Further, it has proposed that companies should earmark 2 per cent of the average profit of the preceding three years for corporate social responsibility activities, and make a disclosure to shareholders about the policy adopted in the process.
The Companies Bill (2008), which lapsed with dissolution of the 14th Lok Sabha, was reintroduced in August 2009.
