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LS passes buyback Bill

Our Bureau

NEW DELHI, Nov. 29

THE Lok Sabha today passed the Companies (Third Amendment) Bill, 2001 aiming at relaxing the buyback provisions applicable to Indian companies. The Bill is awaiting the clearance of the Rajya Sabha before it finds its way into the statute books.

The Bill provides for companies to buy back up to 10 per cent of their shares from the market without recourse to a special resolution adopted at an general body meeting.

It also reduced the period between two consecutive share buy-back programmes by a company from 24 months to 12 months.

Replying to a debate in the Bill, the Minister for Law, Justice and Company Affairs, Mr Arun Jaitley, said that the Bill is primarily aimed at improving the sentiments in the stock market.

Responding to criticism to adopting the ordinance route to allow flexibility in the buy-back operations of c8.8

ompanies, Mr Jaitley said that the sagging stock markets had forced the Government to consider an early easing of the provisions. The Ordnance was promulgated on October 23.

``We wanted the stock market to improve. In the last few weeks there has been some positive movement in the stock market. The provisions would only benefit the economy and the shareholders,'' Mr Jaitley said.

He said that the small investors would be particularly benefited since the share prices of the company planning to go in for a buy-back was bound to move upwards.