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Journalism of Courage
The Ministry of Corporate Affairs (MCA) has said that mining concessionaires must go a step further than giving shares to people residing in mining project areas and allow them to sell or transfer their shares in addition to assuring adequate measures aimed at enabling them lead a life of dignity.
In its recent note to a Parliamentary Standing Committee,which is currently scrutinising the Mines and Minerals (Development & Regulation) Bill 2011 (MMDR Bill),the MCA suggested that certain provisions of the Bill should be fine-tuned in accordance with the provisions of the Companies Act 1956.
Under Clause 43 (3) of the legislation,a company holding a mining lease will have to shell out at least one non-transferable share for consideration other than cash to each family impacted by mining operations.
The Companies Act permits free transfer of shares subject to a lock-in restriction on the promoters of a public listed firm,while in the case of private firms the transfer can be done after Board approval.
Thus under the Companies Act,for any form of company,a window for transfer/sale of shares ought to be provided to the shareholders with adequate safeguards for protecting the rights of the affected families. So the Clause 43(3) needs to be fine-tuned in accordance with the provisions of the Companies Act, the MCA said.
In addition,the ministry has stated that the MMDR Bill does not reflect the changed priorities of the mineral sector and has told the Standing Committee that firms formed as limited liability partnerships (LLPs) should also be allowed to participate in mining bids.
The Bill states that only companies set up under the Companies Act or registered under the Partnership Act and listed with the Indian Bureau of Mines would be eligible for grant of mining leases.
The MMDR Bill seeks to remove a host of anomalies in the existing Act,such as enabling registered cooperatives to obtain mining concessions for small deposits in order to encourage tribals and marginal miners.
