The Union Cabinet today cleared Bills to amend the Companies Act, 1956, and the Airports Authority of India Act.
It also cleared a proposal to withdraw the Companies (Amendment) Bill, 1997, because its provisions have been incorporated in the new Bill to be tabled in the current session of Parliament.
The amendment to the Airports Authority of India Act will facilitate setting up greenfield airports and keeping them out of the purview of the authority.
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The airports authority will only be responsible for air traffic control and security. Ministry officials said the amendment would also consider the issue of leasing existing airports, paving the way for their privatisation.
The amendment will allow the levy of airport development fund for the greenfield airports on passengers embarking at existing airports. This will help Bangalore International Airport Ltd to achieve financial closure.
The Cabinet, however, deferred a decision on the comprehensive long-term liquefied natural gas policy because of differences between the petroleum and finance ministries over certain fiscal concessions for the sector.
The Companies (Amendment) Bill, 2003, has incorporated the suggestions of the Naresh Chandra committee on independent directors, on the dependence of an auditor on a single client, and also on restrictions on loans by companies to subsidiaries.
The department of company affairs, which had moved the proposal, retained some provisions of the 1997 Bill, like the appointment of women directors.
Officials said the department had recommended that the definition of independent directors proposed by the Naresh Chandra committee on the corporate-auditor relationship be accepted.
The committee had said independent directors should not be allowed transactions with the company or its promoters, and should not own substantial stakes in the company. Neither should they be related to promoters nor be partners of the statutory audit firm.
The Bill, however, does not prescribe the number of independent directors. The officials said these would be prescribed through rules once the Bill was cleared by Parliament. It also proposes to permit companies to hold board meetings through video-conferences.