Skip to main content

Corp Affairs Ministry Objects to Some Suggestions of Sebi Panel

Corp Affairs Ministry Objects to Some Suggestions of Sebi Panel
Says Companies Act already covers matters related to committee's recommendations
The Ministry of Corporate Affairs (MCA) has opposed some of the recommendations made by the Securities and Exchange Board of India (Sebi) committee on corporate governance on the grounds that they concern matters already covered by the Companies Act.
The committee, which was set up by Sebi to suggest ways in which to enhance corporate governance standards, has called for an increase in the minimum number of directors and the inclusion of at least one independent woman board member -areas under the ambit of the Companies Act and therefore not under the remit of the market regulator.
“Committee proposes to make recommendations which seek to empower Sebi to prescribe a number of additional requirements on matters which have been core company law principles and find place, rightly so, under Companies Act,“ MCA joint secretary AK Bhatia said in a letter to Uday Kotak, chairman of the Sebi committee on corporate governance.The letter was among the annexures attached to the report. Sebi released the report for feedback on Thursday . Regarding women directors, MCA said: “The woman director may not be restricted to independent director only. The issue can be addressed if a provision is made whereby there may be one woman director who is not a relative.“
The corporate affairs department also expressed concern that some recommendations seek to extend jurisdiction to unlisted companies, which are regulated by MCA. This relates to the obligations of a listed company's board with respect to subsidiaries.
It said the recommendation on a minimum four board meetings a year wasn't necessary. “There is a provision under proviso to Section 173 whereby the central government may change the requirement of minimum number of board meetings for a certain class of companies,“ MCA said. “Necessary changes if required can be brought under the Companies Act, 2013, through issue of a notification.“ It also objected to the committee's suggestion that independent directors can't be swapped for alternate directors, saying this conflicted with existing provisions of the Companies Act. “There is no need for a separate prescription under the Sebi's Listing Obligations and Disclosure Require ments,“ MCA said.
In a separate letter also attached as an annexure, the finance ministry said that such an amendment would create practical difficulties. “On the one hand the committee recommends requirement of at least 50% attendance for independent directors (ID) and on the other hand it is suggesting that no alternate director may be permitted in the place of ID,“ the finance ministry's letter said.The committee had also called for splitting the posts of chairman and managing directorCEO, which is held by one person in many companies.
Union minister Piyush Goyal had said Friday that the Kotak panel report was “completely off the mark“ on some matters while welcoming other recommendations.
The Economic Times, New Delhi, 09th October 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

RBI rushes in to prop up falling rupee

RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…