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DCA Secretary on SEBI board

Our Bureau

NEW DELHI, March 30

IN a bid to ensure better coordination and harmonisation in the day-to-day working environment of the Securities and Exchange Board of India (SEBI) and the Department of Company Affairs (DCA) and towards more effective corporate governance, the Governmen t has appointed the Secretary, DCA, Dr. P.L. Sanjeev Reddy, as a Director on the SEBI board with immediate effect.

According to the DCA, the induction of Dr. Reddy at this juncture, when the Second Amendment Bill of the Companies Act is under consideration by Parliament, will give a new direction and dimension in the fields of investor protection, capital market deve lopment, competition law and matters relating to insolvency laws.

The proposed Second Amendment of the Companies Act has a large number of issues which are overlapping between the SEBI and the DCA. With Dr. Reddy's appointment, both the bodies can adopt a coordinated approach, Mr. A. Ramaswamy, Joint Secretary, DCA, sa id.

Mr. Ramaswamy further said that the Y.K. Alagh Committee, set up by DCA to study the aspect of bringing cooperatives within the fold of the Companies Act by converting existing cooperative business into companies, has recently submitted its report. The D epartment is looking into the issues and either will introduce modifications in the Second Amendment Bill, which is likely to be taken up in the monsoon session of Parliament, or introduce new Bills, he said.

On the Insolvency Committee, Mr. Ramaswamy said that the committee has been holding a series of meetings and now, it is going to hold meetings in Chennai and Kochi. The winding up procedures in the country so far have been unfavourable to the depositors. It is always the financial institutions (FIs), then the unsecured creditors and finally, the depositors, he pointed out.

The DCA has also been taking serious action against vanishing companies. It has initiated prosecutions against 142 vanishing companies. While the Investor Protection Cell of the DCA has received 39,878 complaints in the last three years, redressed 17,054 and penal action has been taken against 211.

The Department is also taking a serious view of companies which are failing to file their annual returns. The DCA is planning to take up the issue with the respective chambers of commerce and is asking them to speak to their members.