After Naresh Chandra and Shardul Shroff committees, the government has decided to set up another committee under the chairmanship of Naresh Chandra to simplify corporate laws and rationalise entry and exit procedures for small and private companies. The new committee would also suggest scientific and rational regulatory environment and look at quality of regulation. Prosecution against 117 vanishing companies New Delhi: Government has launched 117 prosecutions against vanishing companies. Sebi has identified 229 listed companies as ‘vanished’ so far. The prosecutions, which were being delayed due to “technical defaults” like non-filing of balance sheets and annual returns, were expedited after government took a decision in December 2001 to proceed against such companies for non-compoundable offences, carrying the punishment of imprisonment, an official statement said here. Besides, Sebi has also barred 92 companies and 352 directors from raising money from capital markets or dealing with the capital markets in any form for five years. ENS The nine-member committee has been asked to submit its first report on small amd medium companies within 45 days and the final one within 90 days.Addressing the media, secretary of the Department of Company Affairs V. K. Dhall said “while keeping in mind the impact on various stake holders there is a need to provide a structural environment that is conducive to growth and prosperity of the entities and at the same time is effective in regulating their activities in a manner that minimises and deters exploitation by unscrupulous elements.” The other members of the committee include C. R. Dua (legal expert), S. D. Israni (company secretary), N. V. Iyer (chartered accountant), Ashok Kapur (representative of the small and medium enterprises), Rajiv Mehrishi (joint secretary in DCA), Kalpana Morparia (ICICI), Shardul Shroff (corporate lawyer) and Ashok Haldia (Institute of Chartered Accountants of India).Government has already embarked upon reforming the Companies Act, for which a comprehensive legislation was introduced in 1997 and subsequently referred to parliamentary standing committee. Some of the provisions of this legislation have already been incorporated in the Companies Act. For the remaining recommendations—barring those which have become redundant—government would bring in a legislation in the Budget session.Addressing the issue of Serious Fraud Investigation Office (SFIO), Dhall said that the supervision of the SFIO would be under two high level committees. One committee would be under the Cabinet Secretary which would include among others DCA secretary. The other committee would be under the DCA secretary directly in which representatives of other regulatory agencies like Sebi, CBI etc, would also be there. The second committee would look into day to day investigations of the SFIO.According to Dhall as of now, DCA would refer those cases to SFIO in which there are violations of Companies Act. There would be no new legislations for the operation of the SFIO. “It would work under the Companies Act and would have the powers which are already vested with the regulator under the Act”, Dhall stated.
