From Sachin Pilot to CII: Who said what on passage of Companies Bill

Hailing the passage of the Companies Bill, 2012, India Inc said government should now focus on the practical aspects of complying with its provisions like norms dealing with corporate social responsibility spending.

Parliament in Thuesday passed the much-awaited Companies Bill which is aimed at protecting the interest of employees and small investors. The government said that it would give impetus to growth and bring transparency.

[caption id=“attachment_1021519” align=“alignleft” width=“380”] Image for representation only. AFP[/caption]

The Companies Bill, which will replace the nearly 50-year-old Companies Act, was passed by Rajya Sabha by voice vote. Lok Sabha had given its assent in December last year.

Replying to the debate on the bill in the Rajya Sabha, Corporate Affairs Minister Sachin Pilot said it sought to bring India’s corporate governance in sync with the changing business environment of the 21st century.

Pilot said the bill was progressive and the main focus was on enhancing transparency and compliance and it would help growth of the economy.

“For the next two to three decades, this (new legislation) will bring positivity in the economy,” said Pilot adding that the views of all the stakeholders, including industry chambers, have been taken into consideration.

“The focus of the bill is to enhance transparency and ensure fewer regulations, self-reporting and disclosure,” Pilot said.

“This was a long time coming. The new law brings our corporate law closer to global standards and would definitely go a long way in improving how business is done,” said Dinesh Kanabar, deputy CEO of KPMG in India.

“Now that the law is ready, it is time to focus and work on the practical aspects of complying with its provisions. One such vital provision is surely the clause dealing with CSR spend,” CII said in a statement.

It said that in a country where 75-80 per cent of the businesses are family-run/ promoter-driven, the new law would be able to achieve the fine balancing between ownership and management, which is crucial for success of any enterprise.

Sharing similar views, Ficci said:“We welcomes the passage of the Bill which will give India a comprehensive and contemporary legislation. This legislation is indeed a milestone in the history of company law and will revolutionise the administration and management of businesses in the times to come”.

It said the Bill has been through many stages of discussion and has brought in many radical changes to the erstwhile Act.

“Industry hopes that the Working Rules which are expected to be put out in the public domain before notification would provide greater clarity on the operative provisions in the Bill while taking into account legitimate concerns of India Inc,” it said.

Ficci said the Bill has introduced numerous changes and concepts which should simplify regulations and bring greater clarity and transparency in managing businesses.

“We are certain and hopeful that the new Companies Act while providing an enabling environment for smooth working and growth of India Inc. will also address valid concerns of the Industry,” it said.

DK Mittal, former ministry of corporate affairs (MCA) secretary,told CNBC-TV18 that the forward-looking Companies Bill will have long-term consequences in the way Indian companies are governed right from the day of its inception to them being liquidated.

However, Mittal added that the Bill should empower the shareholders to ask questions to the management and that would be a very legitimate demand.

Politician D Raja said companies’ spend on corporate social responsibility (CSR) should be converted into a cess, but Pilot dismissed this suggestion saying the government is not ‘a licenced raj’, and hence CSR will not be treated as a Cess or tax.

Surepe Court lawyer Harish Salve, however, expressed reservations over the powers given to Serious Fraud Investigation Office (SFIO) in the new Bill.

“With the kind of complaints that are filed against companies and the way the CBI has been acting on complaints relating to corporate offences, then I think this will be yet another major set back to the Bill,” he said in an interview with CNBC-TV18.

With inputs from PTI