Samir Zaveri, who had filed the PIL, told the court that annual income of the suburban Railways was Rs1,824 crore, while expenditure was Rs1,624 leaving a balance of Rs200 crore as surplus
With amendments to the Companies Act 2013, the present government seems to be moving quickly to address past mistakes in legislation. But has it done a thorough job?
One area where the Modi government seems to be moving swiftly and silently is to fix bad laws that were written by the UPA over the past decade. The new Companies Act, 2013, to replace the Companies Act 1956, was hurriedly pushed through parliament in the last few months of UPA government, despite serious concerns about its broad sweep, onerous reporting requirements and draconian provisions. (Check out Moneylife Cover Story, 19 September 2013, New Companies Bill & SEBI Ordinance: Hope, Hype & Horror).
The managing director of a blue-chip company told me that the government had received seven lakh representations from companies, chambers of commerce and professionals about hardship it would cause. Every one of them was ignored and the Act was hurriedly passed.
The NDA, after it swept to power, has been quietly making changes through hurried notifications. So, a little after a year the Companies Act, 2013, was passed, the Lok Sabha, on 17th December, has passed the Companies (Amendment) Bill, 2014. Getting the Bill cleared by the Rajya Sabha will be more difficult but not because members will be more diligent in examining the Bill in greater detail.
The amendment, among other things, seeks to address the confidentiality and privacy concerns of businesses. The previous Act required certain board resolutions to be filed with the RoC (registrar of companies); public inspection of such documents will now be prohibited. However, industry wanted the government to scrap the filing requirement itself which hasn’t happened. What I am concerned with is the lack of any public discussion while amending a key Act, especially since the government seems to be listening only to the concerns of big industry houses and chambers of commerce and not to investors, depositors or small businesses, running private limited companies.
The amended Act prescribes specific punishment for raising deposits in violation of the provisions of the new Act. This will stop many dubious companies raising deposits in the garb of hybrid bonds and debentures without being subject to any regulation. But it still does not address the problem of MCA’s failure to act decisively to redress complaints.
Thousands of depositors have filed complaints with the CLB (company law board) against companies like Elder Pharma, Birla Power Solutions, Neesa Leisure, Plethico Pharma, Ind Swift, Micro Technologies India, Ankur Drugs, Asian Electronics and the Ansal group, for failure to pay interest or refund matured deposits. There is no response. What happens to these cases? What happens in future to such cases, if the new law is not used in the interests of the depositors?
If Nifty closes below 8,250, we may see some more weakness