The Bill, which replaces the 57-year old regulations, aims to protect interest of employees and small investors while encouraging companies to undertake social welfare voluntarily instead of imposing that through 'inspector raj'
President Pranab Mukherjee has given his assent to the Companies Bill 2013. With this move, India has now got a new company law that has replaced the erstwhile Companies Act 1956.
The Bill, which replaces the 57-year old regulations, aims to protect interest of employees and small investors while encouraging companies to undertake social welfare voluntarily instead of imposing that through 'inspector raj'.
Given the recent corporate scandals there has been a greater focus on better corporate governance and transparency in the new Companies Bill with stricter punitive action. However, its effectiveness would be known only when the provisions come into force.
Last week, while speaking at a Moneylife Foundation seminar, Savithri Parekh, Head of Legal & Secretarial, Pidilite Industries, said, "The new Companies Bill has brought in a lot of transparency by making companies disseminate information in a clear and transparent manner."
Jayant Thakur, Chartered Accountant, who advises listed and non-listed companies and intermediaries on SEBI laws, said, “Many of the new provisions in the new version of the Companies Bill 2012 have been made because of two major incidents, one is the Satyam scam and the other is that of Sahara. These two incidents raised many questions with the provisions of the existing law such as that of independent directors, voting powers etc. and how could the shareholders be compensated for the losses. All this has led to new provisions such as that of class action suits.”
In December 2011, the Bill was introduced in the Lok Sabha by the then corporate affairs minister Veerappa Moily after he withdrew a similar legislation of 2009 on the ground that the revised measure incorporating several recommendations and suggestions made by the Parliamentary Standing Committee on Finance and various stakeholders.
For the first time, the Bill makes it mandatory for firms to maintain their documents in electronic format, introduces the concept of e-governance, makes provision for encouraging ethical corporate behaviour and rewards employees for their integrity.
Read: Key highlights of Companies Bill (Companies Bill gets Parliamentary nod, finally)
Among the measures proposed in the fresh bill to enhance accountability are those, which provide for additional disclosure norms, facilitate raising of capital, mergers and acquisition and protection of investors and minority shareholders, the Statement on Objects and Reasons of the Bill said.
The Corporate Affairs Ministry is expected in the next few weeks to come up with draft rules for public comments.
A close above 5,500 on the Nifty may add more strength to the current up move
The indices back home moved with mostly in the positive zone on Friday except for a plunge in the red during the noon session when they hit their day’s low. However, near the end of the session, these indices made a smart recovery to hit a four day high (including today).
Both Sensex and Nifty had a positive opening for the second consecutive session. The Sensex opened at 18,425 while the Nifty opened at 5,407. The Sensex moved in the range of 18,273 and 18,679 and closed near the day’s high at 18,620 (up 219 points or 1.19%) which is also its 11-day closing high. The Nifty moved in the range of 5,360 and 5,493 and closed near the day’s high at 5,472 (up 63 points or 1.16%). The National Stock Exchange (NSE) broke the past five day trend of rising volume, it recorded a volume of 77.11 crore shares.
Among the other indices on the NSE, the top five gainers were, Dividend Opportunities (2.11%); PSU Bank (2.00%); Finance (1.94%); Pharma (1.92%) and Media (1.79%). While those which fell were Metal (2.06%); Commodities (0.41%); Realty (0.13%) and Auto (0.03%).
Of the 50 stocks on the Nifty, 28 ended in the green. The top gainers were Bajaj Auto (5.26%); Cipla (5.05%); TCS (4.26%); HDFC (4.24%) and Hindustan Unilever (4.20%). Jindal Steel & Power (9.22%); Grasim (3.16%); Ranbaxy (2.63%); Tata Steel (2.53%) and Hindalco (2.43%) were the top losers on Friday.
Prime Minister Manmohan Singh, today said, that the crashing value of the rupee was part of a needed adjustment that would make Asia's third-largest economy more competitive. The prime minister promised his government would reduce the "unsustainably large" current account deficit undermining the currency. The prime minister also ruled out reversal of reforms or resorting to capital controls to rescue the sliding rupee, which he said fell on account of domestic as well as global factors. "To some extent, depreciation can be good for the economy as this will help to increase our export competitiveness and discourage imports," he said.
Yesterday, finance minister P Chidambaram, while speaking at the Third Parliamentary Consultative Committee Meeting of his Ministry had said that banks must ensure flow of credit to every sector of industry. He said that bankers have been told to be sympathetic and have humane approach towards genuine defaulters. He said that this is time for hand holding of borrowers who are facing difficulties, especially industry. He said that genuine defaulters and willful defaulters need to be dealt with separately. We have to be strict with willful defaulters, he added. The subject matter for the discussion of the meeting was NPAs in Public Sector Banks (PSBs) and measures taken to contain them.
The Forward Markets Commission (FMC), which regulates the commodity futures market in India, has raised the initial margin on gold futures to 5% from 4% for domestic traders effective 2 September 2013. The FMC move comes after gold prices rose 18% to reach a record high earlier this week. The FMC also imposed an additional 5% margin on gold, silver and crude oil futures contracts from 2 September 2013.
On the similar ground, India is considering a plan to direct commercial banks to buy gold from ordinary citizens and divert it to precious metal refiners in an attempt to curb imports and bring stability to the currency. A pilot project, initially limited to big gold portfolios, will be launched soon.
US stocks rose on Thursday as data showed the economy expanded at a faster pace in the second quarter and concerns over Syria eased. Gross domestic product rose at a 2.5% annualized rate, up from an initial estimate of 1.7%, Commerce Department figures showed Thursday in Washington. Jobless claims in the week ended August 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said.
Except for Nikkei 225 (down 0.53%) and Straits Times (down 0.30%) all the other Asian indices closed in the green. Jakarta Composite was the top gainer, up 2.23%.
Japan's consumer prices increased at the fastest pace since 2008 in July, adding to signs that Prime Minister Shinzo Abe is making progress in pulling the economy out of 15 years of deflation. Consumer prices excluding fresh food climbed 0.7% from a year earlier, the statistics bureau said today in Tokyo.
The prospect of imminent military strikes on Syria receded as the UK and France said they favor waiting for the results of a United Nations investigation into alleged use of chemical weapons. The UK Parliament has voted against the use of force in Syria. The US which says it has evidence that Syria's government was responsible, won't act without allies, Defense Secretary Chuck Hagel said. Meanwhile, the White House told US congressional leaders that a potential strike on Syria would focus on removing the regime's chemical-weapons capability.
European indices were trading in the negative while US Futures were trading in the green. Market now awaits the data on unemployment and consumer confidence from the euro zone.
SEBI said, OCAL fraudulently diverted Rs35.25 crore from the IPO proceeds to Fincare, Precise and KPT, who were found to be acting hand in glove with the company
Market regulator Securities and Exchange Board of India (SEBI) has directed Onelife Capital Advisors Ltd (OCAL) and its managing director Pandoo P Naig to bring Rs35.25 crore from Fincare Financial & Consultancy Services (Fincare), Precise Consulting & Engineering and KPT Infotech Ltd within six months. Both OCAL and Naig would remain barred from the securities market for three years.
Earlier in January, SEBI declined to revoke a ban that restrained OCAL, its merchant banker Atherstone Capital Markets Ltd and various senior officials of the two companies from the markets regarding alleged irregularities in OCAL's share-sale.
OCAL came out with an IPO in September 2011 to raise Rs36.85 crore.
In its latest order, SEBI has asked the board of directors of OCAL to submit a monthly progress report and also submit a compliance report.
In addition, the market regulator has barred other non-executive and independent directors of OCAL, TKP Naig, DC Parikh, AP Shukla, TS Raghavan and T Shirdharani from taking up assignment as director in any company for one year.
SEBI said, within short time after closing its IPO, the company OCAL fraudulently diverted Rs35.25 crore to Fincare, Precise and KPT, who were found to be acting hand in glove with the issuer for the purposes other than objects of the IPO.