Sources in the know said Mukherjee found the section lacking in clarity and wanted the ministry of corporate affairs (MCA) to once again work out the areas that would fall under Sebi. Mukherjee was also expected to meet corporate affairs minister Veerappa Moily on Tuesday evening to work out the modalities in this regard, the sources added.
"The FM wanted certain sections in the Bill to be clearer. The clause over delegation of power to Sebi is unclear," a source who attended the Cabinet meeting told FE. Another government official privy to the Cabinet discussions said MCA would be given up to 10 days to clearly work out the section in question. He however, said that if the issue was resolved earlier the Bill could be presented in the Cabinet meeeting on November 3.
Issues over the jurisdiction of Sebi and MCA have been raked up several times in the recent past. While in the extant Companies Act, Sebi is responsible for regulating those companies that use the capital markets to raise funds, MCA's jurisdiction expands to over 8 lakh unlisted companies in the country. However, MCA is empowered to tighten extant regulations to strengthen shareholders and make certain set of disclosures mandatory for companies.
Very recently, issues of regulatory overlap between MCA and Sebi had come up when two Sahara Group companies refused to comply with the market regulator's orders saying that since the firms concerned were unlisted they were beyond Sebi's jurisdiction.
Corporate Professionals managing partner Pavan K Vijay, who has been consulted by MCA on several issues, said, The Bill, to the best of my knowledge, is very clear on this aspect. All capital markets related issues fall under Sebi and it has been made very clear in the Bill. There is no ambiguity at all".