“We were determined on tabling the parliamentary committee report on the Companies Bill, 2009, by the monsoon session of Parliament and we have done it. Now we will table the revised bill by the winter session and by the end of this fiscal, you will see the bill becoming a law,” Corporate Affairs Secretary R Bandyopadhayay told reporters on the sidelines of a CII conference on corporate governance.
The standing committee report on the new Companies Bill was presented in the Lok Sabha last week after nearly eight months of deliberation. Accroding to the report, the MCA has accepted suggestions made by the panel in about 500 cases and even suggested revised formulations in about 125 cases.
“We are considering the Committee’s report with an open mind. Making legislative vetting wherever necessary. We appreciate the committee’s suggestions,” the Secretary said.
The Bill also introduces for the first time in India the concept of class action suits, which would empower investors to sue a company for “oppression and mismanagement” and claim damages.
Also, the Serious Fraud Investigation Office, which played a active role in investigating the accounts bungling at Satyam Computer Services disclosed and perpetrated by founder B Ramalinga Raju in January last year, will also get statutory existence.
Besides other things, the Bill also proposes to tighten the laws for raising money from the public.
There will be a single forum for approval of mergers and acquisitions, whether domestic or with foreign entities. Also, the procedure for merger of holdings and wholly-owned subsidiaries will be shortened.
The Bill also seeks to prohibit insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.
To check the menace of vanishing companies, under the proposed law, every director would be given a unique Director Identification Number that would make their identification and tracking easier.
The bill will also make it mandatory for listed companies to have 33 per cent independent directors and provide for formation of a One Person Company (OPC), while empowering the government to have a simpler compliance regime for small companies.