Companies bill to be introduced in Parliament

Posted on    30 July 2009

Update on new Companies Bill, 2008

The Companies Bill 2008 which lapsed when the 14th Lok Sabha session was dissolved is set to be re-introduced into the ongoing parliamentary session this week.

Since its last introduction in the parliament, lots of developments have been seen in the corporate world. The most important of them was the Satyam debacle.

Due to the above reason the government has proposed some important changes in the bill which were not included in the bill which was earlier presented in the previous parliamentary session.

For instance Corporate Affairs Minister Mr. Salman khurshid said that the ministry is considering insertion of clause relating to Class Action Suits in the Companies bill. Mr. Khurshid also laid stress on defining the duties and responsibilities of the Independent Directors of the company.

Unlike in U.S., small investors in Indian Cos are not able to get compensation in the cases of frauds. But after insertion of the law of class action suits, investors will be able to fight for justice.

Class action suit is one brought by one party on behalf of a group of individuals to file for claims against erring companies in a court of law.

Recently a NGO Midas Touch Investor Association had filed a petition with National Consumer Disputes Redressal Commission asking for compensation on behalf of satyam investors. It claimed damages of Rs. 4,987 Crs from Satyam, Raju Brothers, PWC and independent directors.

-Chitrank Jain


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