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New cos Bill to provide stiffer penalties
July, 10th 2006
Stiffer penalties, including enhanced fines and imprisonment, as a deterrent against violations by corporates and provisions ensuring greater transparency and accountability will form part of the comprehensive Companies Law amendment Bill that is proposed to be tabled in Parliament in the winter session.
The new companies Bill, which has taken liberally from the recommendations of the JJ Irani committee, will also virtually slash by half the original Act of 1956 which has about 781 sections that will make the law easy to understand and comply with.
In the new law, the punishment for violations by corporates will be commensurate with the offences like cheating of shareholders, misinformation, siphoning of funds and defaults, many of which have criminal intent, company affairs minister Prem Chand Gupta told PTI in an interview.
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