The Companies Bill, 2009, comes in the backdrop of the multi-crore accounting fraud in Satyam Computer Services last year, which exposed gaping holes in the existing corporate governance norms in the country, highlighting the need for stricter norms
The new Companies Act promising more shareholder democracy and tighter governance norms for corporates is likely to be enacted this year, corporate affairs secretary R Bandyopadhyay said on Wednesday, reports PTI.
"We are hopeful that the committee (parliamentary standing committee) will be giving its reports very quickly...
Maybe in the monsoon session... and the ministry will take another two to three months. By the end of this year hopefully we will have a new Act," Mr Bandyopadhyay told reporters on the sidelines of a CII event in New Delhi.
The Companies Bill, 2009, which lapsed with the dissolution of the 14th Lok Sabha, was reintroduced in the Lok Sabha in August last year.
The Bill comes in the backdrop of the multi-crore accounting fraud in Satyam Computer Services last year, which exposed gaping holes in the existing corporate governance norms in the country, highlighting the need for stricter norms.
Corporate affairs minister Salman Khurshid had earlier said the new Companies Bill seeks to fix more responsibility on independent directors and the government is currently framing norms for their appointment and conduct.
The new legislation, he had said, will also protect the rights of the minority shareholders, bring about responsible self-regulation with adequate disclosure and accountability and lesser government control over internal corporate processes.
Besides other things, the Bill also proposes to tighten the laws for raising money from the public.
There will be a single forum for approval of mergers and acquisitions, whether domestic or with foreign entities. Also, the procedure for merger of holdings and wholly-owned subsidiaries will be shortened.
The Bill also seeks to prohibit insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.
To check the menace of vanishing companies, under the proposed law, every director would be given a unique Director Identification Number that would make their identification and tracking easier.
The Bill also provides for a framework for enabling fair valuations of companies for various purposes and strengthening the Investor Education and Protection Fund.
It will also make it mandatory for listed companies to have 33% independent directors and provides for formation of a One Person Company (OPC), while empowering the government to have a simpler compliance regime for small companies.
As mentioned earlier, the market is making a laboured attempt to rally
The market was volatile with trading being range bound. The Sensex ended at 16,657, higher by 41 points (0.2%) and the Nifty ended at 5,000, higher by 13 points (0.2%). The benchmarks were up in the early trading session. The market touched its intraday high of 16,817 in the early afternoon session. However, it slid from there sharply but bounced back from the red to end in the positive zone.
The Shanghai Composite was up 2.78%, the most in two weeks, on reports of a rise in exports and higher-than-expected new loans in May. Key benchmarks in Singapore and Hong Kong were up 0.34% to 0.84%. Among other Asian markets, major indices in Indonesia, Japan, South Korea and Taiwan were down by 0.03% to 1.12%.
US markets were up in volatile trading on Tuesday (8th June), supported by materials and financial stocks; however, trading was subdued in big-cap technology shares on concerns over their European exposure. The Dow was up 123 points (1.2%) to 9,940. The S&P 500 was up 11.5 points (1.1%) to 1,062. The Nasdaq dropped 3.3 points (0.15%) to 2,170.5.
The International Monetary Fund (IMF) said that the euro crisis could affect global trade dampening the demand for Asian exports and sending "hot money" into the region if policymakers fail to act swiftly and appropriately. The strong growth prospects in Asia were also likely to bring capital inflows into the region leading to an asset bubble.
Chinese exports in May grew about 50% from a year earlier. Consumer prices in May rose 3.1% from a year earlier, accelerating from 2.8% in April.
Back home, the government has a cash balance of Rs480 billion with the Reserve Bank of India (RBI) and will spend it gradually rather than in one go. It will expand liquidity support as banks are likely to need more cash ahead of the payment of advance tax and payment towards the broadband wireless access (BWA) spectrum fees.
The finance minister said that the target of direct tax receipts for the financial year 2010-11 is expected to exceed the target of Rs4.30 lakh crore.
Foreign institutional investors were net sellers on Tuesday of Rs242 crore. Domestic institutional investors bought stocks worth Rs41 crore.
The board of Interface Financial Services (up 9%) has decided to increase the authorised share capital from the existing Rs6 crore to Rs76 crore by issuing 70,00,00,000 equity shares of Re1 each. It also approved raising funds to the tune of Rs20 crore by offering, issuing and allotting convertible warrants on a preferential basis and Rs50 crore by way of QIP/FCCB/GDR/ADR. The company has also decided to disinvest shares from its wholly-owned subsidiary companies-Interface Housing Finance Ltd and Interface Network Marketing Pvt Ltd.
California Software Company (Calsoft) (down 0.3%) has announced that its business unit Calsoft Enterprise Solutions Ltd will henceforth be known as Inatech.
Aurionpro Solutions Ltd (down 0.6%), through its wholly-owned subsidiary E2E Infotech Ltd, has entered into a global partnership agreement with CameronTec, the financial industry's leading provider of FIX infrastructure and connectivity solutions.
Spice Mobiles (down 0.2%) said that the name of the company has been changed from 'Spice Mobiles' to 'Spice Mobility' with effect from 7 June 2010. Further, the company has received the Certificate of Incorporation issued by the Registrar of Companies, Uttar Pradesh and Uttaranchal.
Wipro (down 2%) will merge Yardley Consumer Care with itself. Wipro Yardley Consumer Care was formed after Wipro Consumer Care, which sells products like the 'Santoor' brand of soaps, acquired personal care brand Yardley from the UK-based Lornamead Group for about Rs214 crore last November.