The cabinet approval for the repromulgation of the bill is likely to be obtained on Thursday. The ordinance is expected to be repromulgated by this weekend.

The repromulgated ordinance will include all the changes incorporated in the Companies (Amendment) Bill, 1998, with respect to intercorporate deposits, buyback of shares and sweat equity introduced in Lok Sabha on Tuesday.

It is learnt that the Department of Company Affairs (DCA), the administrative ministry in this case, has already drafted a note for the cabinet emphasising the need to repromulgate the ordinance, particularly given the business sentiment in the economy.

In fact, minister for law, justice and company affairs M Thambi Durai has stated in the "statement of objects and reasons" of the bill that "in order to overcome the adverse conditions faced by the corporate sector, itwas felt that the company should be permitted to buy back its own shares, to make investments or loans freely without the approval of the central government, to provide for nomination facility to holders of shares, deposits and debentures and also to make provision in law for establishment of investor education and protection fund broadly on the lines of provisions contained in Companies Bill, 1997."

The BJP-led government had moved the bill in the lower house on Tuesday for consideration and passage in order to replace the ordinance promulgated on October 31.

The bill could not be considered for passage on Tuesday for lack of quorum. On Wednesday, the house was disrupted several times on the issue of statehood for Vananchal and finally adjourned sine die before the Companies (Amendment) Bill could be considered.

This ordinance will technically lapse only on January 12, 1999, six weeks from the date of promulgation when a parliament session is convened. The government, however, is keen that thisordinance be replaced with a revised version at the earliest as the earlier one contained certain provisions, especially for intercorporate investments, which were considered too restrictive and anti-business.

The Companies (Amendment) Bill, 1998, incorporates several changes. These include restriction of buyback of shares to 25 per cent of the paid-up capital and funds used for the purpose should not exceed 25 per cent of the paid-up capital and free reserves.

It has further stated that the prior approval of the public financial institutions will not be required in case of loan/investment/guarantee up to 60 per cent of the net worth of the company, provided there is no instance of default in repayment of loan/interest to public financial institutions.

The bill has also stated that a company shall not make intercorporate investments if there is a default in repayment of deposit or interest thereon. Additionally, it had stated that a special resolution would be required for the issue of sweatequity.