(a) whether it is proposed to amend the Companies Act, 1956 to protect the interest of small investors;
(b) if so, the details thereof and the time by which it is proposed to be amended; and
(c) if not, the reasons therefor?
(a) whether it is proposed to amend the Companies Act, 1956 to protect the interest of small investors;
(b) if so, the details thereof and the time by which it is proposed to be amended; and
(c) if not, the reasons therefor?
MINISTER OF LAW, JUSTICE & COMPANY AFFAIRS AND SHIPPING (SHRI ARUN JAITLEY )
(a): Yes, Sir.
(b) & (c): The Government is bringing forward an amendment in the Companies Act through the Companies (Second Amendment) Bill, 1999. The gist is as under:
(A) Every fund received from banks after the default (under Section 58A) for working capital purposes shall be utilised first for repayment of deposits and interest of small depositors before applying the funds for any other use;
(B) Section 58A defaulting companies will report to the CLB about the details of depositors to whom the payments have not been made;
(C) To make provision for postal ballot;
(D) A director of a section 58A defaulting company will be debarred from becoming Director in any other company;
(E) Dividend declared will have to be paid within 30 days instead of 42 days;
(F) The fines have been increased by ten times in case of default.