New Company Law Bill to be introduced in budget session
February, 19th 2008
It will promote shareholders democracy: Prem Chand Gupta
The new Company Law Bill, undergoing finishing touches, will be introduced in the budget session of Parliament, Corporate Affairs Minister Prem Chand Gupta said here on Saturday.
Addressing the plenary session on The corporate affairs of India: The way forward at the Federation of Indian Chambers of Commerce and Industrys (FICCI) annual general meeting, Mr. Gupta said: The new law will promote shareholders democracy, replace the approval-based system with a system of responsible disclosures, promote good corporate governance and effective protection of investors.
The judicial aspect would be administered by the Competition Commission of India (CCI). In order to address the various issues that came up during the litigation against the proposed CCI, the law has been amended and now we are in the process of operationalising the CCI at the earliest, he said.
Allaying the trade and industrys concerns over combination regulation, Mr. Gupta said: I have discussed these issues with my officers in the Ministry as well as officers of the CCI and found that most of the apprehensions happen to be the outcome of incomplete and inadequate appreciation of the law and fear of the unknown based on an apparent presumption that the provisions of the law are going to be implemented with a negative mindset.
The Minister said he had advised the Ministry officials to address the genuine concerns of all stakeholders through regulations, which should be framed through a transparent and wide consultative process. He asked the corporates to look at these regulations with an open and positive mind as no law can be evaluated on the presumption of lack of good faith and that too, before it is actually implemented.
Mr. Gupta said a major problem relating to corporate functioning was the slow liquidation process. Today, it took 10 years on an average for a company to be liquidated. In this process, the worth of the assets get eroded. The issue was now being addressed in the new law, with the approach based on the general principles adopted by the U.N. Commission on International Trade Law.
The Minister said an important aspect of the competition law related to protection of the consumers interests. In our zeal and enthusiasm for immediate gains, we should not ignore the fact that for long-term and sustainable prosperity our trade and industry is very much dependent on the welfare of the consumers.