Companies Bill likely to be re-introduced this week

The new Companies Bill, 2008, which lapsed after the 14th Lok Sabha was dissolved, is likely to be re-introduced in Parliament this week, official sources said.

The Bill will be re-introduced in its present form and amendments will be made after vetting by the Parliamentary Standing Committee, the sources added.

Post Satyam fraud, which came to light after founder chairman of the IT firm confessed manipulating the books of accounts of his company for several years, the government is planning to further strengthen various provisions of the Bill.

It plans to make amendments including incorporation of class action suit and specifying accountability of independent directors in the Bill. Further, the government also seeks to make norms for auditors tougher and corporate governance norms more stringent.

Former Corporate Affairs Minister Prem Chand Gupta had said there was a case for re-looking at certain provisions of the Bill to enable the government to take swift and more effective action in cases of large scale frauds.

The Companies Bill, which seeks to replace the 52-year-old Companies Act 1956, was tabled last year in the Lok Sabha paving the way for radical changes in the country’s regulatory environment for corporates while limiting the government’s role and empowering shareholders.