233 PSUs without company secretary, to face RoC ire

Written by fe Bureau | New Delhi | Updated: Aug 1 2009, 05:17am hrs
The Registrar of Companies is likely to act against more than 200 public sector undertakings (PSUs) for not implementing the mandatory provision of Companies Act, 1956, of appointing a company secretary.

In a written reply to a question on Thursday, corporate affairs minister Salman Khurshid said, "As per available information, 233 PSUs have not appointed a company secretary. Normally, PSUs are unable to appoint a company secretary due to their financial position and non-availability of suitable company secretaries."

The Companies Act, 1956, read with Companies (Appointment and Qualifications of Secretary) Rules, 1988, require every company having paid up share capital of Rs 5 crore or more to appoint a whole-time company secretary. In case of non-implementation of this norm, Registrar of Companies can take "suitable action" against the defaulting companies, Khushid said.

Earlier this month, the Comptroller & Auditor General of India (CAG) also came down heavily on PSUs, pointing out the financial irregularities in their functioning. In a series of reports, the CAG showed that central PSUs (CPSUs) caused financial implications of more than Rs 8,000 crore through their inconsistent operations during 2007-08.

The CAG had also questioned the implementation of corporate governance norms by more than 25 CPSUs, including navratna ones like Bhel, ONGC, SAIL and the Power Finance Corporation.