Panel to harmonise Cos Bill with IT Bill

Panel to harmonise Cos Bill with IT Bill
ENS ECONOMIC BUREAU

July 17: The Department of Company Affairs has constituted a core group to work out harmonisation of the Companies (Amendment) Bill 1997 and Companies (Second Amendment) Bill 1999 with the Information Technology Act 2000.

The two Bills are scheduled to be taken up and passed in the forthcoming monsoon session of Parliament.

The group will also have a relook at all forms and returns under the Companies Act in order to make them computer savvy and technology friendly with provisions of secret code for subscriber and acceptor. Simultaneously, the rules under the Companies Act are being finetuned to make them computer friendly, a press release issued by the department stated.

The five member core group will pay special attention to the provisions relating to authentication of electronic records, legal recognition of electronics records, digital signature, retention of electronic goods, security procedure and certifying procedures of the IT Act.

The group will also rework the provisions relating to investor protection and auditing of electronic balance sheets to bring them in conformity with IT Act. This would allow regional directors and registrars of companies (RoCs) to accept prescribed documents including forms and returns through the electronic mode.

The press release stated that the function of the director general of investigation and research and the Monopolies & Restrictive Trade Practices Act along with the proposed Competition Law are also being harmonized with the IT Act in line with the practices prevailing in countries such as UK, USA, France, Germany and Australia.

The five member group comprises both the joint secretaries of DCA, director (inspection), director (vigilance) and senior technical director of National Informatics Centre attached to the DCA.

FDI NORMS NOTIFIED:The government on Monday notified the increase in foreign direct investment (FDI) limit to 100 per cent in power, e-commerce and oil-refining sectors and removal of dividend balancing clause for consumer goods industries.

The changes in the FDI policy were cleared by the cabinet last month. The sectoral cap on e-commerce has been lifted with a rider that such companies would divest 26 per cent of their equity in favour of the public in five years, if listed overseas. These companies would be engaged in business to business (B2B) e-commerce and not in retail trading. In other words, existing restrictions on FDI in domestic trading would be applicable to e-commerce as well.

With a view to attracting FDI, the condition of dividend balancing in all foreign investment proposals, including industries in the 22 specified consumer goods sector, has been removed.

As per the dividend balancing clause, it was mandatory for consumer goods industries to balance foreign exchange outgo on account of dividend payments through exports. The government has also removed the Rs 1,500-crore limit on 100 per cent FDI in projects relating to electricity generation, transmission and distribution.

Earlier, automatic approval for 100 per cent FDI in generation, transmission and distribution was allowed provided the project cost did not exceed Rs 1,500 crore. Automatic approval limit for FDI in oil refining has also been increased from 49 per cent to 100 per cent, the release said.