Reintroducing the Companies Bill, 2008, in Parliament would be a top priority on the governments first 100-day agenda, corporate affairs minister Salman Khursheed said on Monday.
The Institute of Chartered Accountants of India (Icai) and the Institute of Company Secretaries of India (ICSI) have given some valuable inputs and the ministry may decide to reintroduce the Bill with some amendments, although the basic structure of the Bill is likely to remain intact, Khursheed said.
The Bill was introduced in the Lok Sabha in October by Prem Chand Gupta, corporate affairs minister in the previous government, and was intended to replace the Companies Act of 1956. However, it lapsed when the 14th Lok Sabha was dissolved. It is my desire that the Bill is presented before Parliament in the forthcoming budget session, Khursheed said.
The budget session is expected to convene in the first week of July. Officials of the ministry of corporate affairs (MCA) made a presentation on the Bill to Khursheed on Monday.
The Bill that lapsed was introduced after a consultative procedure including industry and professional bodies such as the Icai, ICSI and the Institute of Cost and Works Accountants of India.
The process of drafting the Bill, which makes it easier to start and close firms and protects the interests of shareholders and investors, started five years ago. The Bill also seeks to make firms and their promoters more accountable, and will affect around 800,000 firms.
Khursheed said the swindle at Satyam Computer Services Ltd, that came to light on 7 January, also merited a rethink on some of the provisions of the draft legislation.
In the wake of Satyam case, the Companies Bill needs to be strengthened, especially with regard to giving more powers to auditors and the procedure for appointment of auditors that will ensure their independence, said Uttam Prakash Agarwal, president, Icai, Indias top accounting body. In the current Companies Act, these powers are weak.
Khursheed also said other priority areas for the first 100 days include hastening the work of investigation on the fraud at Satyam. I will review powers given to the Serious Frauds Investigation Office tomorrow (Tuesday) and work out ways of how to strengthen it.
Khursheed said the government would intervene only if there was large-scale retrenchment at Satyam by Tech Mahindra Ltd, which has recently acquired the company. In such a situation, its not only MCA but other ministries, such as the labour ministry, will be also involved.