The ministry of corporate affairs would consider amending some of the key provisions in the new Companies Bill?2008, which is currently before the standing committee on finance. The move comes in view of the biggest accounting fraud to have occurred in the country?s corporate history with the revelations made by Satyam Computer Service.
Officials said with Satyam fraud emerging on Thursday, senior officials of the ministry were closeted in a series of meeting deliberating the changes to be made in the provisions so that harsher norms could be introduced keeping in the light the latest fraud.
Premchand Gupta, minister for corporate affairs told FE, ?We have to see which provisions have to be revisited. Our main idea is to ensure that we have a fair regulatory system and for that we need to revisit the present provisions?.
According to an MCA official, in most likelihood the provision related to the aspect of corporate governance and corporate valuation are going to be revisited. All these provisions would be made stricter so that no company would be in a position to bypass them, he added. The government is seeking to replace the 52-year-old Companies Act, 1956 with the new legislation, a Bill for which was introduced in the Rajya Sabha in October. The proposed legislation is primarily aimed at updating corporate laws and reducing state control over the affairs of companies.
The main aim of the Companies Bill, 2008 is to give the advantage of self-regulation to the corporate sector. However, the recent Satyam case appears to be a large-scale fraud. The minister said the government will ?leave no stone unturned to punish the guilty. It, however, does not mean suspecting every company?.
The ministry of corporate affairs has already asked the Registrar of Companies, Hyderabad, to enquire into the affairs of Satyam following disclosure by B Ramalinga Raju, who has since resigned from the post of chairman. The MCA has also referred the case for investigation to the Serious Frauds Investigation Office (SFIO), even before receiving a report from the RoC, according to ministry officials.