Buy-back ordinance awaits President’s nod

The ordinance is now expected to be promulgated on Friday when the president returns from Gujarat.

The government had proposed to introduce buyback of shares, permit sweat equity and free limits on inter-corporate investment through an ordinance by Wednesday evening. The draft had been finalised by the department of company affairs (DCA) with law ministry bureaucrats late on Tuesday evening.

The DCA officials had swung into action on a directive from the prime minister’s office on framing a draft for presidentialassent.

The decision to introduce buyback and free limits on inter-corporate deposits soon was announced by prime minister Atal Behari Vajpayee during his inaugural address of the annual session of the Federation of Indian Chambers of Commerce and Industry (Ficci) here on Saturday.

The proposed amendments to the Companies Act was thereafter cleared by the Cabinet which met here on Monday.

While the government is very keen to introduce buyback through an ordinance as a measure to revive the sagging sentiments in the capital market, it is not clear as yet whether the president will go along with the government’s decision.

Certain quarters of the government felt that the president could hold back his assent as the winter session of Parliament has already been notified. It is felt that an ordinance at this stage may be affront to the legislature.