Wednesday, 16 October 2019
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Ministry of Company Affairs remnaed as Ministry of Corporate Affairs

The ‘Ministry of Company Affairs’ has been renamed as the ‘Ministry of Corporate Affairs’ vide Presidential Notification dated the 9th May 2007 amending the Government of India (Allocation of Business) Rules, 1961. “The new name not merely reflects a change in the form but also in the vision and approach that drives the initiatives of the Ministry”, said the Minister, Shri Prem Chand Gupta while recounting the reasons for changing the name.

The focus of the Ministry’s working is no longer limited to the administration of companies but has increasingly acquired an all-inclusive role of addressing a wide sweep of functions - Corporate Governance reforms and the emerging legal framework. With the introduction of the ‘Lbbbimited Liability Partnership Bill’ proposing a new corporate structure, the amendments in the Acts governing the three professional institutions viz. the Institute of Chartered Accountants of India, the Institute of Costs & Works Accountants of India, and the Institute of Company Secretaries of India, notification of Accounting Standards, the initiatives being taken towards operationalisation of the ‘Competition Commission of India’, etc., the Ministry has, during the period of last two years, re-oriented itself to meet the expectations of a vibrant corporate sector in its march towards the global competitive environment.

The implementation of MCA21 e-Governance Project, a mission mode project under the National e-Governance Plan, has brought about a complete turn around in the manner of delivery of services to the corporate sector. It is online, it is fast, it is transparent and it has largely eliminated the need for the stakeholders to physically visit the Registrars’ offices and the drudgery of queuing-up with loads of paper. With more than 4.5 crore sheets of legacy records having been scanned and digitised, and the continuous enrichment of the electronic registry on an on-going basis the citizens can view public documents on-line any time anywhere from the comforts of their offices or homes.

The Ministry is engaged in a complete revamp of the legal framework for the corporate sector. A new form of body corporate is proposed to be enabled through the proposed legislation on Limited Liability Partnerships for which the Bill has already been introduced in the Parliament. It is expected that this new framework will provide a significant boost to the growth of professional and knowledge domain in the country in an organised form. Similarly, amendments to the Competition Act, 2002 are at advanced stages of processing to enable operationalisation of a full-fledged Competition Commission of India.

The Companies Act, 1956 is itself under a comprehensive revision. Having followed the process of wide consultation with the stakeholders and examination of the proposals by an Expert Group headed by Dr. JJ Irani, the draft for the new Company Law is at the vetting stage. “We can understand the anxiety of the corporate world who have been waiting for this new law but it has to be appreciated that the Companies Act, 1956 is the single largest piece of legislation and it takes time to re-write a piece of legislation which is envisaged to be not only simple and easy to understand but also forward-looking in keeping with the dynamic process of change in an international environment,” explained the Minister.

The notification of Accounting Standards is another milestone to bring the Indian corporate financial reporting systems in line with the international practices. The new Accounting Standards are not only expected to strengthen the system of disclosures for the stakeholders but also bring about parity with the international standards in a significant manner. This has become important in view of the Indian corporate stretching their operations beyond the national boundaries.

Comprehensive restructuring of the legal framework apart, the Ministry is currently involved in restructuring its work processes both at the Head Office as well as in the field set up. The plan includes provision for a ‘new look’ physical infrastructure facilities with new office complexes planned to be constructed at certain places and the others being spruced up matching the corporate expectations.

Corporate Governance and investor protection are also priority areas. The Ministry has redefined its vision and proposes to work towards taking the corporate governance to a level that enables India to compete with the developed economies with simultaneous focus on creating investor awareness and the need for adoption of Corporate Social Responsibility as a part of the enlightened good Corporate Governance practices. The Ministry has sponsored two important websites namely www.watchoutinvestors.com and www.investorhelpline.in under the Investor Education and Protection Fund in furtherance of its investor education and protection plans. While the first is a Registry of economic defaulters indicted by various regulatory authorities/ Courts, the second is a window provided for effectively addressing the investors’ grievances.

The Government established the Serious Frauds Investigation Office (SFIO) in October, 2003 in the backdrop of certain corporate frauds committed in the past including the stock market scam. The SFIO is fully functional now and has already completed investigations in about 30 cases of serious frauds referred to it by the Ministry. Following a multi-disciplinary investigation approach, the SFIO is being further strengthened with improvement of skill-sets.

Establishment of an Indian Institute of Corporate Affairs has been envisioned to provide a think-tank support to the ministry in partnership with the corporate sector in its efforts to translate its vision into a reality. “We look forward to a very meaningful participation of the corporate leadership and professionals through this platform on an on-going basis,” the Minister said. The proposed institute is envisaged to perform multiple roles of knowledge management, think-tank, capacity building for the ministry’s staff and provision of value added services through a single registry in addition to implementation of financial literacy programmes to enhance the investor awareness.

The revised nomenclature is more representative of the new role of the Ministry, captured in the new vision: “To be a leader and partner in initiatives for corporate reforms, good governance and enlightened regulation, with a view to promote and facilitate effective corporate functioning and investor protection”.

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