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

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Firms with sales below Rs.50 crore out of ambit

The tax department has reiterated that the PoEM rules, which require foreign firms to pay taxes in India if the effective control is here, will not apply to companies withaturnover of Rs.50 crore or less inafinancial year. Last month, the tax department had come out with the longawaited Place of Effective Management (PoEM) rules, which require foreign companies in India and Indian firms with overseas subsidiaries to pay local taxes if their businesses are effectively controlled by Indians. Then the rules did not setathreshold above which they were to apply. However, the accompanying press release states that the rules will not apply to companies withaturnover of up to Rs.50 crore inayear. That created confusion whether the threshold will be adhered to. Inacircular to clarify things, the Central Board of Direct Taxes (CBDT) said the provision "shall not apply toacompany havingaturnover or gross receipts of ~50 crore or less inafinancial year".

PoEM rules essentially target shell …