More investor protection likely in new Companies Bill

By Our Special Correspondent

NEW DELHI, FEB. 7. The new Companies Bill, which is expected to be passed by Parliament during its next session, contains many provisions for enhanced investor protection, the former Secretary in the Department of Company Affairs and now Election Commissioner, Mr. T. S. Krishna Murthy, has said.

In an interaction with members of the Institute of Company Secretaries of India here, Mr. Krishna Murthy said the Companies (second amendment) Bill 1999 contained some 224 clauses out of which 110 clauses related to enhancing the penalties including imprisonment for investor protection. The significant changes proposed in the Bill included changes about entry norms for private companies, enhancing jurisdiction of the Securities and Exchange Board of India (SEBI) and protection of small investors by giving more powers to the Company Law Board.

According to Mr. Krishna Murthy, the new Bill also contained provisions for the introduction of ballot papers for annual general meetings, fixing of directors' responsibilities, provisions of interim dividend, provisions for disqualification of directors, setting up of audit committees, reducing the number of directors to 15 and the requirement of secretarial compliance certificate.

The Election Commissioner also felt that a new era of corporate governance would be ushered in with the passage of the new Companies Bill. He also urged the company secretaries to sharpen their skills to carve out a place for themselves in a competitive environment since corporate concepts and practices were changing globally and foreign investors coming into the country in large numbers.

On behalf of the Institute of Company Secretaries, its past President, Mr. R. Krishnan, said the Kumaramangalam Committee report on corporate governance and the Companies (second amendment) Bill 1999 had coincided and both were similar to a large extent. Mr. Krishnan pointed out that the Companies Act, 1956 had been amended 19 times and the latest Bill had been introduced to ensure corporate governance as well. The SEBI had also been given powers to govern 20,000 odd companies for strict corporate governance, he said.

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Section  : Business
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