January 18, 2002
‘7’
LAW MINISTER ALLAYS FEARS OF CORPORATE SECTOR
The Union Minister of Law, Justice and Company Affairs, Shri Arun Jaitley allayed the fears of corporate sector over the Companies (Amendment) Act, 2000 relating to public deposits and more particularly provision of Section 274 (1) (g) regarding disqualification of directors saying that only those directors would be disqualified who defaulted the provisions of the Companies Act. Inaugurating the 29th All India Conference of Corporate Managers and Tax Executives under the auspices of Federation of Indian Chambers of Commerce and Industry (FICCI) here today, Shri Jaitley called upon the corporate managers to introspect as 80 per cent profit making companies didn't declare dividends which looked a little depressing. He told them to consider the plight of investors in Non-Baking Financial Companies (NBFCs), plantation companies and others. Shri Jaitley reiterated that the legislation was meaningful one and intended to protect the interest of investors and shareholders. Nevertheless, he assured the corporate managers that the Government was open to discussion.
The Law Minister also addressed some of the apprehensions raised by corporate managers of FICCI over the Competition Bill, 2001 and need for such a law for India. He said that in the emerging globalisation of Indian economy , Competition Law was necessary to regulate the competition and quality of products and services and to prevent abuse of dominance, anti-competition agreements like cartelization and collusive biding and to prevent merger and amalgamations if it affected adversely competition through a regulator to be appointed under the proposed legislation. The Minister, however, assured the corporate managers that their apprehension would be addressed by the Standing Committee of Parliament, which was seized of the problem. The Minister said that the corporate sectors’ fears on this account were exaggerated. He, however, said that in the absence of competition law, the alternative was existing MRTP Act, which was the worst.
Giving an overview of amendments effected in the Companies Act, 1956 and other related laws so far and those that were on the anvil, the Minister said that the Companies (Amendment) Bill, 2001 providing for a time bound new insolvency law, repealing of the Sick Industries (Special Provisions) Act, 1985 and dismantling of BIFR constituted thereunder, the Companies (Second Amendment) Bill, 2001 providing for options to manufacturing cooperatives to come within the Companies Act, the Companies (Amendment) Act, 2001, replacing the Ordinance on rationalising and easing buy-back of shares, the Competition Bill, 2001 and their implications in the changing corporate environment were some of the measures intended to create wealth and make Indian economy competitive globally.
The Law Minister’s inaugural speech was followed by a question-answer session wherein the Minister addressed and allayed the apprehensions, misgivings and doubts of the corporate managers and assured them of the commitment and responsiveness of the Government to their changing and growing requirements.