The government is going mysteriously slow on pressing for the passage of the Companies Bill, 2011. Business and political observers are flummoxed over what transpired in the past day or two that has led to the stalling of what looked like a done deal just a couple of days ago.
There are many theories doing the rounds. The uppermost, about the BJP’s reservations on a number of clauses, doesn’t cut much ice given that the party seemed to have come on board just days ago.
Another, largely unsubstantiated, reason being bandied around is that the immediate passage of the Bill seems to have fallen victim to shadowy corporate lobbying on behalf of companies that have much to lose if it is passed in the current form.
Ostensibly, the clause to make private placement norms for unlisted firms more stringent is proving to be the thorn in the flesh for certain companies whose plans to raise big money through this route would have come unstuck if the Bill was passed in the ongoing Parliament session.
The sudden turn of events has mystified even members of Parliament's standing committee on finance, which deliberated on the Bill. “We had made 172 recommendations, of which 165 have been accepted by the government. We don’t know why there is a delay. The only reason could be that some corporate houses want the bill delayed,” said a member.
But, such is the sensitivity around the issue that no one is willing to come on the record.
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Having introduced the Bill in Parliament in December, the government cannot pull it out unless it gets leave of the House to withdraw it. The Bill has neither been withdrawn nor pressed for passage.
A top BJP leader said the issue came up in their meeting with Finance Minister Pranab Mukherjee two days ago, when he sought their support for the pension Bill. The leader said Mukherjee agreed to take on board a suggestion to include limited liability partnerships, which would enable a group comprised only of professionals from one category like chartered accountants, or company secretaries, etc to form their own company.
In the meeting, the BJP also raised the issue of representations made by some companies. “Pranab Mukherjee heard us out and told us he would look at the Bill,” party leaders said. The representations related to private placement threshold limits.