New Company Law could clash with Sebi norms on independent directors

The J J Irani Committee, formed to suggest the framework of the new law, has recommended that the independent directors should form one-third of the boards.

Gupta said Sebi was a sectoral regulator for listed companies while the law would deal with all companies and would have wide scope of work.

When asked whether a situation could emerge where listed companies comply with Sebi guidelines while unlisted ones fill only a third of their board positions with independent directors, Gupta refused to comment.

He said the New Companies Bill would be tabled by the end of this year (winter session), saying that it would not be possible to introduce the Bill in the monsoon session due to some inter-departmental delays.

“I would have liked to place the Bill in Parliament earlier but as it will replace an old complicated Act, the consultation process is taking time,” he said. The Bill has been pending for more than two years.

On the issue regulating salaries paid to top company executives, Gupta said, “The industry has reacted in haste to the Prime Minister’s speech (at the CII last month). He just pointed out that there are some expenditure which can be curtailed in the interest of inclusive growth in the country.”