Mooting greater transparency regarding donations by corporate houses to political parties, the Corporate Affairs Minister, Mr Salman Khurshid, said on Wednesday that his Ministry has already recommended the inclusion of norms for disclosure of the details of such funding in the new Companies Bill.
He said this is important from the point of view of better corporate governance and shareholder democracy as such disclosures will help shareholders in getting specific information on the amount of money given and to whom as well as the purpose of such donations. The draft Companies Bill is currently being considered by the Parliamentary Standing Committee on Finance.
Mr Khurshid indicated that his Ministry may come up with voluntary guidelines for companies in this regard if its recommendations do not ultimately find a place in the Bill. He was speaking at an All India Management Association conference.
According to the present norms, companies can donate up to 5 per cent of its profit in a year. But it is compulsory for them to state this amount in its profit and loss account. Moreover, such donations should be carried out with the consent of the company’s board of directors through a resolution.
The Bill is likely to be passed by Parliament soon and may come into force by this year-end.
