New company law may not be passed: JJ Irani

The recommendations on the new company law that aims at simplifying rules and procedures governing companies may not be passed even in the winter session of the Parliament, according to J J Irani, chairman, expert committee on company law and director of Tata Sons Limited.

Addressing a conference on 'Dr J J Irani Committee Report on Company Law' organised by the Federation of Andhra Pradesh Chambers of Commerce and Industry, J J Irani said, "Although we have been told that the new law will be passed in this winter session of Parliament, I am doubtful about it."

"However, if it goes through the various channels and replaces the existing Companies Act, coinciding with the golden jubilee of the Act in 2006, we should be doing well," he added.

One of the recommendations of the committee has been to make the law uptodate with regard to technological changes so that even board meetings can be done via video-conferencing. Besides, the base percentage of independent directors has been put at 33 per cent.

Besides, celebrities who are roped in as directors of a company, to attract the public to invest, will also be held responsible to the public for two years. Also, any company which raises funds from the public even via the fixed deposits route shall come under the scrutiny of the regulator.

Speaking for self-regulation, B V R Mohan Reddy, chairman-cum-managing director of Infotech Enterprises, said, "The Sarbanes-Oxley Act is said to have increased the cost of a company by $2 million- $3 million. So self-regulation and strong management information systems should be there in all organisations."