Companies Bill has final shape, Cabinet to take view soon: Khurshid

The new Companies Bill, which was tabled in the backdrop of the Rs14,000 crore Satyam fraud, promises greater shareholder democracy and stricter corporate governance norms. The Bill has introduced ideas like mandatory corporate social responsibility, class action suits and a fixed term for independent directors

New Delhi: Law minister Salman Khurshid today said the Companies Bill, 2009, which seeks to replace a half-century-old Act, has taken final shape and Cabinet will soon take a view on it, reports PTI.

"I think he (corporate affairs minister Veerappa Moily) has sent the Cabinet note. It takes a while for the Cabinet note to go through various processes and then come to the Cabinet. I think the final shape has been given and it should come to the Cabinet soon," Mr Khurshid said on the sidelines of an event to mark the formation of the Corporate Knowledge Foundation here.

Mr Khurshid, who earlier held the corporate affairs portfolio, also expressed hope that the Bill would be passed in the Winter Session of Parliament.

The Parliamentary Standing Committee on Finance had given its observations on the Bill in August 2010.

The new Companies Bill, which was tabled in the backdrop of the Rs14,000 crore Satyam fraud, promises greater shareholder democracy and stricter corporate governance norms.

For the first time, the Bill has introduced ideas like mandatory corporate social responsibility (CSR), class action suits and a fixed term for independent directors.

Among other things, it also proposes to tighten the laws for raising money from the public. The Bill also seeks to prohibit any insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.

Further, it has proposed that companies should earmark 2% of their average profit of the preceding three years for CSR activities and make a disclosure to shareholders about the policy adopted in the process.

The Companies Bill (2008), which lapsed with the dissolution of the 14th Lok Sabha, was re-introduced in August 2009.

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COMMENTS

Nagesh Kini FCA

6 years ago

This Bill has been hanging fire. The Final Draft ought to be put on public domain to enable Co. Law professionals like SD Israni, Narayan Varma, Kanu Doshi to meet at ML Foundation to file Final suggestions on Auditors' Report, Corporate Governance, Auditors' rotation etc. Earlier the better.

Dhanlaxmi Bank shares tank by more than 20% after allegations by union

Dhanlaxmi Bank denies all the allegations made by the All India Bank Officers Confederation, which had raised several questions over its business operations, first reported by Moneylife. But the market is not convinced by the bank’s denial

The share price of Dhanlaxmi Bank tanked by more than 20%, touching its 52-week low of Rs54.40, during today's trading session after Moneylife reported on the memorandum sent by the All India Bank Officers Confederation (AIBOC) to the Reserve Bank of India (RBI) regarding the bank's wrongdoing and specifically, alleging that the bank had manipulated accounts and provisioning. (See: The stink coming from Dhanlaxmi Bank: AIBOC raises serious allegations).

Moneylife contacted the bank twice for its specific reaction on the various allegations, well in advance before the article went to press. First, the bank was contacted when the information was sought from the whistleblowers, and later, when the memorandum was sent by the AIBOC's Kerala State Committee to the apex bank.

However, Dhanlaxmi Bank refused to give any comment and said, "Like all banks, we are also regulated by the RBI and the growth is monitored by the regulator periodically. The baseless allegations are being spread by some people who are trying to spoil the image of the bank."

Interestingly, after Moneylife published the story, the bank has given its official version to news channels, where it denied all the allegations made by the union.

Bipin Kabra, Chief Financial Officer (CFO), Dhanlaxmi Bank, was quoted in CNBC saying, "All (these) allegations are baseless.

"The union is getting marginalised every year. Currently, less than 10% workers are in AIBOC. Our current capital adequacy is at around 10%. We see non-performing assets (NPAs) dropping every quarter," he added.

Mr Kabra was quoted in NDTV Profit as saying, "Our financials are being audited and inspected by the regulators. We don't recognise the union-otherwise we would have invited it to go through the financials."

AIBOC had alleged in the memorandum that the bank had manipulated accounts and provisioning, has a mismatch in asset-liability resources, maintains poor capital adequacy ratio and has huge dependence on call-money borrowing. It has also accused the bank of ignoring social banking and financial inclusion.

GD Nadaf, General Secretary of AIBOC said to NDTV Profit, "In November 2010, we wrote a letter to the governor of the RBI that the profitability of the bank is coming down... We thought the RBI will initiate some action... the RBI has acknowledged (our letter) but we don't know its final stand."

Meanwhile, on the Bombay Stock Exchange (BSE), the bank's scrip was trading at Rs62.65 at around 2.35 pm, down by around 12%. Yesterday the stock closed at Rs71.60 on the BSE.

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COMMENTS

Gunalan

6 years ago

The Banking Regulator should made thorough checking of working pattern, capital adequacy etc. and public should be made aware of its findings,because public money is involved

Nagesh Kini FCA

6 years ago

Mr. Kabra's cheap defence of audit, regulatory controls and provisioning for NPAs doesn't sanctify Dhanalaxmi's stand.
It is time the banking regulator steps in to get this merged with another private bank a la GTB. Sooner the better,

Revised Indo-Swiss taxation treaty comes into effect

The amended taxation treaty contains provisions on the exchange of information in accordance with international standards applicable at present. The treaty would be applicable in Switzerland on income originating in tax years starting on or after 1 January 2012, the Swiss Federal Department of Finance said on Monday

Geneva/New Delhi: The amended Indo-Swiss taxation treaty has came into effect, a development that will allow India to seek specific information on black money and tax evasion cases dating back to 1 January 2011, reports PTI.

The revised taxation pact between the two countries came into force on Monday, at a time when the black money issue has triggered an intense political debate in India.

Senior BJP leader LK Advani has said that he would highlight the issue during his 'Jan Chetna Yatra', starting today.

The Swiss Federal Department of Finance yesterday said the revised double taxation agreement with India in the area of taxes on income and capital entered into force on Monday.

"It contains provisions on the exchange of information in accordance with international standards applicable at present," it said in a statement.

The treaty would be applicable in Switzerland on income originating in tax years starting on or after 1 January 2012.

When it comes to the exchange of information, the provisions in the treaty would "apply to information referring to tax years which start on or after 1 January 2011".

The revised treaty would allow India to seek information on cases related to tax evasion. Under the earlier pact, India could only seek bank details in relation to tax fraud cases.

"The provisions of the agreement will apply in India to income originating in tax years which start on or after 1 April 2012," the statement added.

The treaty will contribute to further the positive development of bilateral economic relations, it said.

The revised treaty was approved by Swiss Parliament on 17th June. As per Swiss rules, bilateral tax treaties are subject to public scrutiny for a period of 100 days, which ended on 6th October. India had inked the agreement with Switzerland to revise the treaty in August 2010.

The latest data from the Swiss National Bank shows that the total deposits of Indian individuals and companies in Swiss banks stood at about $2.5 billion at the end of 2010.

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