FM wants more disclosure from cos

Addressing a national seminar on draft companies bill organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) here, he said that it was imperative to take note of this issue in light of considerable growth in the number of companies getting registered with the local authorities. According to him, about 5,000 companies were being registered every month and there was no way to ensure effective regulation. "Several companies do not file returns regularly and this will not be allowed any further."

Chidambaram said the bill on the new company law would be introduced during the monsoon session of the Parliament beginning late next month. "If all goes well, the new law would be effective from April 1 next year," he said.The Finance Minister said the government would not use any further discretion to award more rights to corporates once the law came into effect. The government would cease to partner the private sector and would only play the role of a regulator. "The discretionary power of the government will end once the new bundle of rights is given to the corporates under the new law. There will be no higher sets of rights for any corporate with government’s discretion," he said.

"I reject the idea of government’s discretion in according new set of rights to some corporates," he added.

According to Chidambaram, the basic objective of the bill would be to adopt a modern code of conduct for professionals who need to earn a place in the corporate sector through competence and greater accountability. The bill will also encourage the growth of joint stock companies who are considered the vehicle of economic growth the worldover. He said while the government did not want to intervene or participate in the operation and status of a firm, it would provide greater simplification in the rules for self governance. The new bill would also look at the issue classifying companies at various grades as per their performance and regulate them when they invited public deposits.