New bill to rule out second Satyam fiasco

Kolkata, 2 Sep: The new Companies Bill, likely to be tabled in the Winter Session of Parliament, would contain provisions to rule out a recurrence of the Satyam episode which shattered the confidence of India Inc, minister of state for corporate affairs Salman Khurshid said today.

"Handling of the Satyam case has given India a higher standing in the world. Learning from Satyam will be reflected in the bill," Khurshid said at the National Convention of Company Secretaries here today.

Asked later what provisions the bill would include, he said there would be greater accountability at different levels, strengthening of the Serious Fraud Investigation Office (SFIO) and investigating procedures, and putting in place an early warning system.

Khurshid also said the new bill would contain measures to fix responsibilities in case of criminal acts like the Bhopal gas tragedy.

Khurshid said that even after 26 years, the Bhopal dispute remained unresolved.

He said the ministry was concerned about the role of promoter directors, CEOs and independent directors in case of criminal acts.

The ministry had got good guidance from the Standing Committee of Parliament, which will be incorporated in the final draft of the bill, he said.

"We are also waiting for the Supreme Court's view on liability for criminal acts," he said.

Khurshid said the government would see that regulations were in place to bring about transparency in the running of corporate houses.

"We do not want to enter the boardroom of corporates. But they also should be mindful of their responsibilities. We will be happy with little control," Khurshid said.

He said the Companies Bill had been in the pipeline for the last seven or eight years.

The bill is likely to be tabled in the Winter Session of Parliament and positively by the end of the fiscal.

The final draft was getting prepared, he said.

About the voluntary guidelines which were issued by the ministry, Khurshid said, "The government is toying with the idea of what needs to be shifted to make it mandatory and what to keep voluntary."

Ministry of corporate affairs secretary R Banerjee said that as professionals, company secretaries should keep a watchful eye to ensure compliance with regulations.

"Complaints come to us that company secretaries, instead of guiding corporates the right way, are advising them how to bypass the legislations," he regretted.


(PTI)