The Hindu Business Line : ICSI expert group to work on model Company Law

WITH the Minister for Company Affairs, Mr Premchand Gupta, clearly indicating that the Government would favour a trim Companies Act, the Institute of Companies Secretaries of India (ICSI) has constituted an expert group to work on a model Company Law.

"The expert group is being headed by Mr Ashok Chhabra, Executive Director, Procter & Gamble. Once the group submits its report to the institute, we would forward the same to the Ministry of Company Affairs (MCA)," ICSI sources told Business Line.

Commenting on what a model Company Law would comprise, the sources said, "Today we are marching towards uniform business laws all over the world. To promote international business the need is to provide hassle-free legal framework to the business community."

In fact, the Minister has also been hinting at making Company Law more corporate friendly. This is in tune with what India Inc has been asking for. According to corporate India, "the law should be enabling rather than detrimental to competition and effective growth of the corporate sector."

The Company Law in India has undergone major changes particularly during the last five years, conforming to the global developments and incorporating new emerging concepts, they said, adding, "A need is, however, felt to consolidate and to further simplify the procedures and rationalise the provisions of Company Law so that a comprehensive, simplified, effective and efficient growth-oriented Company Law could be enacted."

It is in this context that ICSI has undertaken a project to evolve a model Company Law and has constituted an expert group. Some of the areas, which according to professionals should be considered in the law, include emphasis on corporate governance, provisions to be either deleted or amended in the light of global developments including information technology and shareholders empowerment.

Another important focus would be investor protection. The Minister has been advocating for greater measures for investor protection and awareness. On the similar lines, the institute is working on a project for creating more investor awareness. "We would be submitting the project report to the Ministry's Investor Protection & Education Fund (IE&PF) committee for funding," the sources said.

Further, ICSI has been closely associated with the capital market regulator, Securities & Exchange Board of India (SEBI), in its investor awareness programmes. It is also working on the pre-budget suggestions to be presented to the Finance Minister, Mr P. Chidambaram.