Law making, fraud fighting make 2013 a watershed year for Corporate Affairs Ministry

Dec 31 2013, 15:00 IST
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We can certainly feel satisfied that we have been able to do substantial work: Sachin Pillot (Thinkstock) We can certainly feel satisfied that we have been able to do substantial work: Sachin Pillot (Thinkstock)
SummaryWe can certainly feel satisfied that we have been able to do substantial work: Sachin Pillot

After fighting numerous frauds in 2013 and changing the way lakhs of corporates function and are regulated, the Corporate Affairs Ministry is looking at the new year to ensure right execution of new companies law and initiatives aimed at safeguarding interest of investors.

"The real challenge is in the execution of the law... The devil lies in the detail," Corporate Affairs Minister Sachin Pilot said, while setting the agenda for 2014 after an eventful year of policy initiatives and other actions.

As the Companies Act 2013 promises a paradigm shift from the way Indian companies have operated and have been regulated over the past six decades, the Ministry is now looking forward to rejuvenate Indian Inc and persuade them to spend on social welfare activities amid uncertain economic prospects.

Relatively younger to many of its counterparts, the Ministry remained in focus during 2013 amid a host of high- profile cases of corporate misdoings, regulatory co-ordination to crackdown on fraudulent investment schemes and not the least, the much talked about inquiry into alleged lobbying activities of Walmart in India.

At a time when the economy is grappling with multiple headwinds, a Ministry-appointed high level panel came up with wide-ranging suggestions to improve the country's business climate.

Strengthening its efforts, the Ministry is now working on early fraud warning mechanism as well as on having a robust data dissemination system.

Amid plethora of illicit money pooling schemes and shady corporate governance practices, protection of investor interests set the agenda for the Ministry which made strenuous efforts to separate wheat from the chaff.

"We can certainly feel satisfied that we have been able to do substantial work," Pilot told PTI in an interview.

Besides, the new Companies Act is set to have a long-term impact and it is not a question of this year or next year.

A first of its kind, the Ministry pulled out a trump card of sorts, by making Corporate Social Responsibility (CSR) spending mandatory for a certain class of profitable companies.

The idea -- set to be a reality from next financial year beginning April 1, 2014 -- is estimated to result in spending to the tune of Rs 15,000 to Rs 20,000 crore a year.

As per the new law, certain category of entities have to shell out at least two per cent of three-year annual average net profit towards CSR activities.

Apart from the arduous work involved in formulating the new legislation, many a corporate misdoings including the

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