Sunday, 31 December 2017
Tuesday, 19 December 2017
Naresh
Gujaral opposed the provision to make it mandatory to have full time company
secretary for those firms whose paid equity capital is Rs 5 crore and above
irrespective of turnover as per section 2 and 3 of the Act. Tapan Sen of
Communist Party of India-Marxist or CPI-M said that this bill would not lead to
ease of doing business in the country but would take our country to ransom.
He
used to be a Chartered Accountant by profession and an industrialist, now is a
MP from Punjab under Shiromani Akali Dal.
Please read the complete story happened
during passing Companies Bill 2017, today in Rajya Sabha:
A bill to amend the companies
law to strengthen corporate governance standards, initiate strict action
against defaulting companies and help improve ease of doing business in the
country, was passed by parliament on Tuesday.
The
Rajya Sabha passed the Companies (Amendment) Bill, 2017 by a voice vote. It was
adopted by the Lok Sabha in July this year during the monsoon session. Replying
to issues raised by the members during a discussion on the bill, minister of
state for corporate affairs P.P. Chaudhary said the amendment would ensure
better corporate governance and improve the ease of doing business in the
country.
The
bill provides for more than 40 amendments to the Companies Act, 2013, which was
passed during the previous united progressive alliance (UPA) regime. The bill
was introduced in the Lok Sabha in March 2016 and then referred to the standing
committee on finance.
After
taking into consideration the recommendations of the panel, the cabinet had
cleared a revised bill in March this year. The Companies Act, 2013 has already
been amended once under the present government. The latest legislation would
help in simplifying procedures, make compliance easy and take stringent action
against defaulting companies, Chaudhary said.
The
minister dismissed the apprehensions raised by members that the government was
not doing enough to ensure that companies comply with the corporate social
responsibility (CSR) provisions. Intervening during the reply, Congress leader
Jairam Ramesh said CSR has become PSR or political social responsibility,
especially for the public sector undertakings.
“There
should be an independent audit for the objective of the CSR” spending of PSUs,
Ramesh said. The minister said the government has already issued notices to
many companies for not complying with CSR provisions under the Companies Act.
On the government’s promptness in taking action against companies at fault, the
minister said the government has taken several step against such firms which
were not taken in last several years.
He
said the government has taken action against over two lakh shell companies and
Special Fraud Investigation Office was looking into it. Under the Act, certain
classes of profitable companies are required to shell out at least 2% of their
3-year annual average net profit towards CSR activities. In case of
non-expenditure, such entities are required to provide the reasons for it to
the ministry.
R.
Ramakrishna (BJP) said there was no provision of carrying forward the CSR funds
and they should be given more time to use these funds. The minister said the
upper limit of 300 days for filing returns under the Act led to non-compliance
and hence changes have been made in the law to improve timely filings.
While
the minister was pushing the bill for passage, former finance minister P.
Chidambaram pointed out,”Why are you taking power to prescribe another number
when Directors’ Index Number (DIN). DIN is a number. Why do you need another
number? What is the idea?” He also opposed the proposal to give loans to
directors and persons, saying a company should not give loans to the director
or to those of interest to a director.
He
also opposed the amendment to delete section 195 and 196 which provide for
prohibition of insider and forward trading. The minister said insider and
forward trading is barred d under the Securities and Exchange Board of India
(Sebi) law and therefore there was no need of this provision in the Act which
would anyway is superseded by the Sebi law.
Chidambaram
said the provision should be part of the Act as Sebi does not have jurisdiction
over unlisted companies and there could associate or subsidiary companies of
listed companies, which can do insider or forward trading.
The
minister said unlisted companies do not do insider or forward trading. V.
Vijayasai Reddy (YSRCP) said the independent directors should not have any
pecuniary interest in the company and they should not continue for longer
terms. He also proposed having a statutory body for appointment of independent directors
and provision of special resolution for their removal from the board.
T.S.
Reddy (Congress) said the independent directors should not be responsible for
companies’ liabilities as this would discourage them to come on board. D. Raja
did not support the bill, saying it was a reiteration of the government to
secure private capital and extend help to private corporates and big companies.
Naresh
Gujaral opposed the provision to make it mandatory to have full time company
secretary for those firms whose paid equity capital is Rs5 crore and above
irrespective of turnover as per section 2 and 3 of the Act. Tapan Sen of
Communist Party of India-Marxist or CPI-M said that this bill would not lead to
ease of doing business in the country but would take our country to ransom.
Subscribe to:
Posts (Atom)