'No disharmony likely between SEBI, proposed Cos Act'
July, 05th 2006
Companies Act, 1956 would always remain the mother Act, while regulatory institutions such as SEBI would be concerned only with listed entities.
The Union Minister for Company Affairs, Mr Prem Chand Gupta, while deliberating on "Corporate Laws and e-Governance" at an interactive session here today, clarified that there would be no disharmony between regulatory institutions, such as the Securities and Exchange Board of India, and the proposed new Companies Act, likely to come up before Parliament in the winter session.
Responding to industry fears over possible disharmony, as currently companies were under the regulation of various bodies such as SEBI, BIFR, Companies Act etc, the Minister said the Companies Act, 1956 would always remain the mother Act, while regulatory institutions such as SEBI would be concerned only with listed entities.
According to Mr S.K. Bangur, President of the Indian Chamber of Commerce, while the Irani Committee had recommended harmonisation of all regulations, the regulations should not only be harmonised but also brought under one statute, namely the Companies Act.
In the context of Clause 49 of SEBI listing Rules, the minister said his department favoured a one-third dispensation of board seats for independent directors in a company board, as stipulated by the Companies Act, as against the 50 per cent laid down by Clause 49.
The Minister favoured a public policy that enables companies in India to carry out self-regulation within the parameters of law; to innovate while ensuring accountability to stakeholders and to be competitive in today's globalised environment. He said this was the broad objective pursued by the Ministry of Company Affairs.