The Hindu Business Line : Companies Act revamp will bring down legal provisions: Gupta

THE Union Minister of State for Company Affairs, Mr Prem Chand Gupta, today scoffed at suggestion that his Ministry and the Securities and Exchange Board of India (SEBI) were at loggerheads on the issue of independent directors' composition.

"There is no rift between SEBI and MCA and only you (the members of professional bodies of accountants and company secretaries) are trying to create the rift on this issue," the Union Minister said.

Mr Gupta was interacting with the members of the Institute of Chartered Accountants of India, Institute of Company Secretaries of India and ICWA held on the premises of the Registrar of Companies here.

He said while the expert panel under Dr J.J. Irani constituted to go into revamp of the Companies Act had suggested 33 per cent for the `independent' directors in the board of companies, some chambers of industries had wanted it to be put at 25 per cent.

The issue, according to the Minister, could be resolved amicably and as for the MCA, whatever percentage was decided should be good for the shareholders and the stakeholders.

The Union Minister, talking to the presspersons in the same venue, said he was optimistic on framing the proposed bill for a new Companies Act within the next two months enabling the Government to place it before Parliament. The expert committee had already submitted its report to the Government.

The comprehensive revamp of the Act intended to simplify the procedure, smoothen its implementation and achieve higher compliance was the need of the hour in view of changed business and industrial climate in a globalised economy, he said adding that after the revamp, the voluminous Indian company law provisions would be trimmed down to a third from the present 780-odd provisions thereby making it matching to any best corporate laws available in the world.

Asserting that investors protection remained a major area of concern for the UPA Government and figured in its common minimum programme of governance, the Minister enumerated his Ministry's action against the `vanishing' companies that took away the monies mobilised from the capital market through public issues.

He said 21 such promoters had been arrested and over 100 FIRs were filed. Of the 229 companies treated as vanished, his Ministry could trace 117 companies.

He also held the view that over 50,000 cases of non-compliance pending before various courts filed against corporates and in most cases, they were to be proceeded against on technical grounds. Of the 6.75 lakh registered companies with the Registrar of Companies (RoCs) across the country, nearly 40 per cent did not file any documents creating doubts on their very existence.

The volume of such companies cast a burden both on the Government as well as the companies themselves, Mr Gupta said and asked these companies to take to the voluntary `exist' scheme route announced by his Ministry.

The scheme is to expire by this month-end and no further extension is needed, he felt.

As part of the e-governance, his Ministry has introduced two pilot project (MCA-21 project) at the RoC offices at Coimbatore and Delhi to facilitate on-line registration and filing documents including the payment remittance.

The project expected to be completed by middle of next year will bring in total computerisation of RoCs across the country, he added.

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