Ordinance on Companies Bill likely

By J. Venkatesan

NEW DELHI, AUG. 25. With the Government unable to introduce the Companies Amendment Bill 2000 in Parliament in the monsoon session, it is likely to promulgate an ordinance to bring the Bill into force.

Last week the Union Cabinet had approved the Bill and it was scheduled for introduction in the Lok Sabha on August 24 but it could not be taken up as the House was adjourned to mourn the death of the Power Minister, Rangarajan Kumaramangalam.

The Bill, which seeks to ensure better corporate governance, investor friendly, transparency in working of companies and protection to shareholders and depositors, could not be taken up today also for want of time and both the Houses had to be adjourned sine die.

According to highly placed sources in the Law Ministry there is pressure from top business houses and various chambers of commerce that the Bill must be given effect to immediately, otherwise the fruits of liberalisation cannot be achieved.

The Government is also not prepared to wait till the winter session of Parliament in November. It is keen that the provisions of the Bill are implemented at once. Hence the indications are that the Government will promulgate an ordinance shortly to enforce the Bill.

As the Bill has already been approved by the standing committee of Parliament the Government is confident that it may not face any difficulty in getting the ordinance approved during the winter session.

It remains to be seen whether clause 122 in the Bill which seeks to insert a proviso in sub-section 1 of Sec. 252 of the Companies Act, 1956 to provide for mandatory representation from small shareholders in the Board of Directions will be retained in the ordinance as the Cabinet had given its nod for deleting this clause.

The Bill envisages more powers to the Department of Company Affairs for effective enforcement of the provisions

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Section  : Business
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