Cross Border Merger of Companies

Cross Border Merger of Companies

Indian Government proposes to incorporate cross border Merger of Comapanies in the Company Bill 2009, which is likely to be introduced in current session of the parliament.
To read the complete news Click Here.

Indian Companies Bill 2009

Companies Bill 2009 likely to be re-introduced this week
Post Satyam fraud, which came to light after founder chairman of the IT firm confessed manipulating the books of accounts of his company for several years, the government is planning to further strengthen various provisions of the Bill.

It plans to make amendments including incorporation of class action suit and specifying accountability of independent directors in the Bill. Further, the government also seeks to make norms for auditors tougher and corporate governance norms more stringent...
To read the full story in "The Economic Times" dated 29th July 2009 Click Here.

Companies Bill 2011 as presented to the Parliament - To Read it  Click Here:  http://www.mca.gov.in/Ministry/pdf/The_Companies_Bill_2011.pdf

IFC, Sebi, CII to sensitise directors on corp governance

IFC, Sebi, CII to sensitise directors on corp governance
IFC, an arm of the World Bank, will hold a series of workshops along with market regulator Sebi and industry body CII to sensitise independent directors about issues concerning corporate governance and the role they can play in preventing frauds like Satyam.
During the workshops, he said, "Independent directors will be sensitised about the need of corporate governance, the issues they need to focus on and the questions they should raise at board meetings."...
The workshop will help independent directors enhance their understanding of their role as a board member and their effective contribution in the working of the board, Kar said.
IFC's global corporate governance forum has partnered NISM to promote awareness of corporate governance in India. The forum also helps in disseminating good corporate governance practices, sponsoring research and supporting technical assistance.
To read the full story Click Here

India (SEBI) Clarifies Employees Stock Option Rules ‏

India's capital markets regulator clarified late Friday that employees of companies can subscribe to stock options even if they have sold the firm's shares during the previous six months.Employees, however, won't be permitted to buy the company's shares within six months of selling stock options, the Securities & Exchange Board of India said in a notice.It said while exercising employee stock options, the code of conduct framed by the company and "the fundamental principles for prohibition of insider trading as specified in the regulations must be complied with."Employees will also have to wait for six months since the last transaction in the company's shares to make an opposite trade, the regulator said.However, shares subscribed to under initial public offerings will only have to be held compulsorily for 30 days, it said.These rules can be waived for personal emergencies for sale of the company's shares if the reasons are recorded in writing and there is no element of insider trading. ...
To read the article Click here

Record number of fraud cases in first half of 2009

Over 160 cases of serious fraud with charges in excess of £100,000 came to UK courts in the first half of this year, according to KPMG Forensic – the highest number of cases in a six month period in the 21 year history of its Fraud Barometer.
The cases had a total value of £636m which, if replicated in the second half of the year, would also lead to the highest value of fraud in the Barometer’s history (currently £1.2bn in 1995). Professional gangs were the most active perpetrators of fraud,..

To read the full article by KPMG Click Here.

Auction mining rights

Auction mining rights
There is no other way to stop corruption...

...an industry body said to represent mining interests, which has come out in opposition to the policy of auctioning mining rights. This seems quixotic, when the mining of oil and gas fields has been accepted policy the world over. The ground rules under which contracts are signed are well established, and there is no reason why prospecting for coal or bauxite should be not be dealt with in the same way, and why proven reserves should not be auctioned to the highest bidder...

As it happens, the government decided more than a year ago that auctions are the right way to go—a stance that China too has taken. The policy adopted in March 2008 said that mining leases would be auctioned to actual users and that exports would be encouraged in value-added form (in other words, the country should export steel, not iron ore). It is not clear that the legislative changes required to give effect to this policy have been carried out; even if they have not, that is only a procedural hurdle...
To Read the complete article by T N Ninan in the Business Standard Click Here.

AIG may seek millions in bonus payouts

AIG may seek millions in bonus payouts
The public was outraged the last time the bailed out insurance giant tried to pay its execs hefty bonuses. But AIG is reportedly talking about trying again.

To read the full story at Money CNN. com Click Here

EMPOWERMENT OF INDEPENDENT DIRECTORS

This has reference to the news item published in “The Hindustan times” dated 9th July 2009, titled “New Bill to define company directors’ role”. It is heartening to know that the government has taken an initiative to provide protection to Independent Director’s by coming up with amendment to the companies act.

The independent director’s (ID’s) in the present scenario of corporate governance in India are being appointed by the promoters/ CEOs, who are very powerful in the corporate world and thus the likelihood of theirs (ID’s) being independence is very unlikely. The protection as being suggested will be very short lived and will not provide a long term solution to the problem. We have to look for an holistic solution to these issue and the IDs need to be “empowered” rather than being protected. I would call it as bill for “EMPOWEREMENT OF IDs” . IDs need to be empowered or their roles well redefined to have a say in the CEOs succession, rather than CEOs appointing the IDs.

It is also pertinent to note here that many of the IDs (high official from government/ public sector) are being appointed by many companies immediately just after they retire from the active service, which also raises questions on IDs independence. It is a fact , the service rules of government provides for a “cool off period” for these high profile government/ public sector employees, but hardly being implemented. One of the criterion for selection/ rejection for an IDs from this category should also form part of the qualification of the IDs for appointment.

Beside, the above it is a well known fact that Indian shareholders are not proactive or are not able to assert themselves in discharging their role. It these category of people who are the most sufferer, when the company like Satyam or their CEOs indulge in unlawful activities. Shareholder activism is hardly heard off in India, but for recent few cases. It is essential that Indian shareholder also need to be empowered to discharge their role in tandem so as to bring about good corporate governance.

Last but not the least, the “Whistle Blowing” need to be given much more priority.
The above article was Published in Live Mint on 10th July 2009 to read the full article Click Here.

New companies bill set for budget session 2009

The new “Companies Bill 2009”, with stricter disclosure norms and provision for one-person corporate entity, will be tabled in the ongoing budget session of parliament.
A new companies bill is being re-introduced as the earlier version had lapsed because of dissolution of the previous Lok Sabha. The provisions in the proposed law would be in accordance with the changing economy. To rad the full News appeared in The Times of India 4th July 2009 Click Here.