December 19, 2017
Vivek Gupta speaks on The Companies (Amendment) Bill, 2017
FULL TRANSCRIPT
Sir, thank you for giving me an opportunity to speak here today. I am recalling the last occasion when I spoke on this Bill and for that I would like to refer to a document which is the statement of object and reasons.
It reads: amendments to the Act were carried out on this Companies (Amendment) in 2015 when we addressed the immediate difficulties arising out of the initial experience of the working of the Act and to facilitate “ease of doing business”.
During the consideration of Companies (Amendment) Bill, 2015 in the Rajya Sabha, more amendments would be required. And companies law committee was therefore constituted with representatives from various sections.
History is repeating itself. I have said this in 2015 and I am forced to repeat it today that again this Bill is inconclusive, it is not going to address at all the issues and concerns that are faced by the Indian industry or corporates, and we are again going to take the time of the Houses of Parliament. This is not my prediction, this is the reality.
I hope the hon minister considers this and takes some corrective action. None of the provisions of this Bill solve any of these problems.
Sir, I would invite the hon minister, through you, to at least visit the registrar of company offices, make it a surprise visit and just see what the conditions are, why is there so much crowd, why are so many company secretaries standing there to get their issues resolved.
When the entire system is computerised, when everyone is filing online, why still people have to go there? You know how the system works in India.
I don’t want to repeat but I am forced to repeat certain things. Some changes are a little threatening, a little frightful to me. The removing of Object Clause, the various Supreme Court judgments and the Income Tax Act at various places refer that specific exemptions are available only if they are mentioned in the Object Clause. I don’t know how the Government plans to harmonise this, it will become a future problem.
In this private placement, at one end the government says 2 lakh companies are being removed, dormant companies we want to get them to stop money laundering; at the same time they want to make money laundering much more easier if these kinds of restrictions are being removed.
Sir, this is a conflict between one arm of the government and the other. I do not know how they propose to remove this. Same is with the case of forward dealing, layers of subsidy – all of these are in complete contradiction to what the government says in other places.
Sir, one important aspect of the Bill, which was not mentioned by anyone and I thought it probably escaped the attention of the minister here, is for providing deposit insurance. Sir, through this Bill, the provision for giving deposit insurance is done away with it. Sir, already the whole nation is in outrage on the FRDI Bill, under the provisions of which, my fixed deposit with the bank can be used to repay the bank’s liabilities. Sir, company deposits are not going to be safe. Are we going to tell the people of India that you should not take fixed deposits with these companies or banks? Sir, I think this is a very serious thing and the minister should take a note of it and give a proper answer.
Sir, Rules to Directors – Section 185. I need not name but there was a former Member of this House who is no longer in this country. The Hon Prime Minister made an announcement to this country that a special law will be made to bring him back and bring all the money which he has taken away. Sir, I think this Section 185 will make it easier for people like him or with such intentions, not only to take money out of this country, but to take money out of companies also, which is the public’s money.
I completely agree with the former finance minister when he said about SMEs. I want to echo him that 40 per cent of the GDP is being provided by the SMEs. However the formula that one size fits all and one lock caters to everybody does not hold. Sir, it is an experiment that has already failed.
Sir, we would request the Hon Minister, to consider that a lot of the sections of the Act are so draconian, it is impossible for SMEs to comply. Sir, what do we expect out of the SMEs – should they ‘make in India’ or should they attend to compliance, which is not applicable to them now.
Sir, an interesting issue is that the Committee on Companies Law made a lot of recommendations. Some of them have not been approved. We would like to know form the hon minister, when he will reply, why they were not approved. I would bring it to your notice one such recommendation. Earlier the definition of resident of India was he has to be resident for 12 months; now the definition is being done away with. So, now, anyone can fly in, become a director from day one, and we would not know what connection he has with India. If we were ever to lay our hands on him, he would seek going back to his own country because the law of this land would not be applicable to him.
Sir, the new Insolvency Ordinance is also a case in point. Whenever we are trying to define related companies, it has been made in such a manner that no companies can bid; corporate shareholder is appearing in so many sections and it has got so many confusions. I would like the hon minister to give some clarity on it, and if possible, make this amendment in this Bill itself.
Last but not the least, this Bill again fails to address the differences with various other Government Bills, RBI Act, SEBI Act and IT Act. I proposed previously also, and would propose to the minister again, to remove such differences and give us some clarity.
Thank you, Sir.
