On March 5, the Reserve Bank superseded the board of Yes Bank in the wake of deepening crisis, mainly due to huge bad loans and a moratorium has been imposed.
A bill to amend the Companies Act 2013 and decriminalise various offences under it was introduced in Lok Sabha on Tuesday, amid opposition by members of various parties. Introducing the bill, Minister of State for Finance and Corporate Affairs Anurag Thakur made it clear that the government was not looking to decriminalise non-compoundable offences. Members from various parties vehemently opposed the introduction of the Companies (Amendment) Bill, 2020.
Raising concerns about the Yes Bank crisis, some Opposition leaders alleged that the bill was aimed to appease corporates and demanded that it should be referred to the Parliamentary Standing Committee on Finance. BJD MP Bhartruhari Mahtab said that through this bill government was seeking to decriminalise certain offences and reducing penalty for others.
Questioning the timing of introduction of the bill, he asked, “Is this an opportune time to introduce the bill when a large private bank has collapsed?”. On March 5, the Reserve Bank superseded the board of Yes Bank in the wake of deepening crisis, mainly due to huge bad loans and a moratorium has been imposed. Under a revival plan, SBI and some private banks have made investments in Yes Bank. Number of companies are folding up because of the activities of promoters, Mahtab said.
Echoing similar sentiments, TMC MP Saugata Roy said it appears that the government is heavily influenced by representatives of industry chambers. “Today (former) CEO of Yes Bank is in Enforcement Directorate custody…the government is seeking to decriminalise certain regulations in the name of ease of doing business,” Roy said. Yes Bank co-founder and former CEO Rana Kapoor is in ED custody.
Seconding the arguments against the bill made by TMC and BJD members, Congress leader of the House Adhir Ranjan Chowdhury said the government can be “identified as by the corpoates… for the corporates”. He further claimed that the government is diluting Corporate Social Responsibility (CSR) norms to help the corporate sector.
“This government is appeasing corporates… it is appeasement of corporates,” Chowdhury said. Responding to the criticism, Thakur said the government was not decriminalising non-compoundable offences, which includes frauds and injury to the public. He also said that CSR regulations are not being eased but only procedural requirements. The amendments in the law would also help reduce the burden on the National Company Law Tribunal (NCLT), he said.