Financial Daily from THE HINDU group of publications
Sunday, May 29, 2005
Financial Daily from THE HINDU group of publications Sunday, May 29, 2005 |
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Corporate
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Economic Offences Corporate frauds will invite controls: Gupta `Choose freedom or regulation' Our Bureau
The Minister for Company Affairs, Mr Prem Chand Gupta, arriving with the ICSI President, Mr R. Ravi (right), to address a seminar on `Corporate frauds' in the Capital on Saturday. - Kamal Narang
New Delhi , May 28 THE Company Affairs Minister, Mr Prem Chand Gupta, has made it clear that corporate behaviour would determine the Government's approach towards granting more freedom or tightening control on corporate activities. Stating that it was for corporates to choose between more freedom and more regulation, Mr Gupta warned that higher incidence of corporate frauds would only tilt the scale towards larger controls. He was addressing a seminar on corporate frauds organised by the Northern India Regional Council of the Institute of Company Secretaries of India (ICSI) on Saturday. Mr Gupta's observations come at a time when the Ministry plans to come up with a new company law that would replace the existing Companies Act, 1956. In his address, Mr Gupta stressed the need for character building and attitudinal change to differentiate between "ambition and destructive greed, between justified risks and irresponsibility and between enterprise and fraud." The Minister said corporate frauds have to be treated with more firmness and that frauds often compelled the Government to tighten the regulatory framework when it was actually in favour of fewer controls. On whether the introduction of a new "compact and practical" company law would entail lesser protection for small investors or minority shareholders, Mr Gupta replied in the negative. "We would not do anything that goes against the interests of small investors," he told reporters here.
Aam admi law? THE aam admi (common man) may get another opportunity to have a say on how the new company law should be fashioned. The Company Affairs Minister, Mr Prem Chand Gupta, on Saturday promised that the Dr J.J.Irani Committee's report would be put on the Ministry of Company Affairs' Web site for public comments. The Dr J.J. Irani Committee, which is to submit its report to Mr Gupta on May 31, had been set up to examine the suggestions received from all stakeholders on the concept paper for a revamped company law. The Ministry of Company Affairs released the concept paper in August last year. The 13-member expert committee was constituted in the first week of December 2004 and it was to give its report within three months. The tenure of the committee was later extended. The Ministry of Company Affairs is now looking to put in place a new company law that would be simpler, compact and easy to administer. "We want to establish a regime that would make compliance easy and also come down heavily on violators," Mr Gupta said. The recommendations of the Dr J.J.Irani committee are keenly awaited by corporate India as every aspect of corporate functioning are to be reviewed by the committee. The Government had also asked the committee to look into the issues of regulatory overlap on various corporate operations.
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