The government today deferred a decision on the new Companies Bill and said it would be taken up next month after sorting out issues concerning delegation of powers to the market regulator Sebi.
“Finance Minister has been told by Sebi that few fine tuning matters have to be taken care of before it is actually goes … since we have time over the next 10 days these things will be fine tuned,” Law Minister Salman Khurshid told reporters after the meeting of the Union Cabinet.
According to sources, the Finance Ministry sought more clarity on how powers would be delegated to the Securities and Exchanges Board of India (Sebi) in case of regulatory overlapses.
Finance Minister Pranab Mukherjee, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Corporate Affairs Minister Veerappa Moily have been asked to discuss and iron out issues before the next Cabinet meeting on November 3.
“Companies Bill came up before Cabinet today. Few points need to be sorted out. We, Finance Minister, Montek and I, have been asked to discuss it. It is a minor issue so it has not been reffered to a GoM. I am hoping by the winter session it should be through,” Moily said.
The Bill has already been vetted by the Parliamentary Standing Committee of Finance and also by different ministries.
For the first time, the Bill has introduced ideas like Corporate Social Responsibility (CSR), class action suits and a fixed term for independent directors.
Among other things, it also proposes to tighten the laws for raising money from the public. The Bill also seeks to prohibit any 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 CSR activities and make a disclosure to shareholders about the policy adopted in the process.
The Companies Bill (2008), which lapsed with the dissolution of the 14th Lok Sabha, was re-introduced in August 2009.