Banerjee, a chartered accountant, is a former president of the Bengal Chamber of Commerce & Industry (BCCI). Banerjee made this comment in an interview to the portal www.aboutcorporateindia.com.

In response to a question on the validity of this proposition that is proposed to be included in the draft Companies (Second Amendment) Bill, 1999, Banerjee commented that, "there could not be a provision for separate constituencies under the Companies Act where a concept of proportional representative is available."

Bannerjee said that having separate constituencies for nominating one director is "not a legally valid provision".

"It is not legal in the sense that Section 265 of the Companies Act allows for proportional representation for majority directors and not for one director only," he clarified.

Banerjee said corporate accounts could be made more transparent if the statutory auditors "quantify" their qualifications. He agreed that the Institute of Chartered Accountants of India (ICAI) should push through the proposal for making quantification of auditor qualifications mandatory.

While the industry has been supporting the idea of more transparency and corporate governance, it has been opposing the proposal for making quantifications of qualifications mandatory. The proposal was tabled by some ICAI members.

Under this provision, companies will have had to draw up a revised profit & loss account after calculating the impact of the various qualifications on the bottomline.

Apart from these two issues, Banerjee stressed the role of independent directors on a company's board. He said that only the nominees of the financial institutions can present an independent view.

In his capacity as the president of the BCCI, he had earlier suggested to the Securities & Exchange Board of India (Sebi) that instead of having independent directors nominated by the management, nominees of financial institutionshould be put on the board. However, he clarified, "I am however not saying that FI nominees till now have done their job". He insisted that there are two issues in implementing the norms - first, it has be legally prescribed and second, FI nominees should keep a strong watch.

Banerjee was also critical of postal ballots, which he feels is an impractical suggestion. An alternative remedy, he said, is already available - voting by proxy.