Quota for women directors set to go

Companies Act to be streamlined.

The Centre will review the quota for women on the boards of companies, according to Minister for Company Affairs Prem Chand Gupta.

The minister told Business Standard yesterday that he had also instructed officials of the department of company affairs to prepare a report on reducing the number of provisions in the Companies Act to about 200 from the existing 696.

He said a new Bill would seek to eliminate all unnecessary and irrelevant provisions from the Act.

Gupta said he believed trade and industry should not face harassment by the government. "They should be freed from the clut- ches of bureaucratic control," he said.

This includes easier winding-up procedures and a limit on how long cases can drag on in the Company Law Board.

Instead, he said there was a need to ensure that the Registrar of Companies played a more pro-active role to ensure that companies cannot not re-name themselves at will to fool the public.

The minister said he had an open mind on the need to have women directors on the boards of companies, but the government should not attempt to overgovern the 800,000-odd companies in the country.

He claimed that by asking for a huge amount of information from companies, the department was only adding to the cost of running them.

According to him, the Registrar of Companies was unable to process the mass of information, including annual returns, and claimed that this led to a waste of national resources.

He said a healthy regime of corporate governance could be ensured by market forces, instead of having more bureaucratic control.

"Let market forces determine the existence of healthy companies and eliminate all unhealthy companies," the minister said. The minister's comment comes in the wake of the Naresh Chandra committee's report on corporate governance.

The minister said he would also take up with the Securities and Exchange Board of India the possible areas for reduction in the size of the prospectus by companies accessing the capital market.

He said the government could ensure that companies revealed all necessary information by coming down heavily on any material non-disclosure by them.

According to him, the Serious Fraud Investigation Office had an important role to play. He said the agency was supposed to investigate a limited number of cases and, more importantly, take them to a logical end in time.