Datla Hanumanta Raju, the new president of the Institute of Company Secretaries of India (ICSI), says he will continue to work to make the profession of company secretaries more effective and efficient. His election was mired in a controversy as the Ministry of Corporate Affairs (MCA) had listed him as a director of a vanishing company (Kamakshi Housing Finance). He talks to Sapna Dogra Singh about this and the issues facing the profession
What is your take on the Kamakshi Housing Finance controversy?
The company was incorporated on December 6, 1994, with the registrar of companies (RoC), Andhra Pradesh, by the name of “Kamakshi Housing Finance Limited”. The company went for a public issue in March 1995. I was appointed as a professional, independent and non-executive director. I resigned from the post of director with effect from August 25, 1995, and the relevant form 32 was filed by the company with the RoC. I was never involved in the day to day working of the company. I was on the board for a brief period.
There was a change in management in 1996 and the name of the company was changed to Kisha Impex in 2000. The company was regular in filing all the documents with the RoC up to 1999. Later, it did not comply with the provisions of the Companies Act and was declared a vanishing company. I made a submission to the (MCA on December 12, 2008, explaining the same with documentary evidence. The MCA considered the matter and deleted my name from the list of directors.
Has your name been cleared by the Securities & Exchange Board of India (Sebi) also?
A similar request has been made to Sebi. I am confident that Sebi will take similar action.
One of the initiatives taken by the Institute of Chartered Accountants of India (ICAI)-the Institute of Cost and Works Accountants of India (ICWAI)-ICSI Coordination Committee was to recognise examinations/ awards/papers of each other. What is the progress on that?
The ICSI and the ICWAI provide paperwise exemptions to their respective students on the basis of reciprocity. The ICAI has been approached for the same.
What kind of powers does the ICSI has against the erring members?
The Company Secretaries Act, 1980, has elaborate provisions regarding action against the erring members. If any member of the institute is found guilty of professional misconduct, his licence can be withdrawn for a period of six months to a lifetime. We have a five-member disciplinary committee in place which also has two government nominees.
What has the ICSI done in its probe on the Satyam fraud?
The institute has sought certain information from the company secretary of Satyam Computer Services. The comments of the company secretary of Satyam were sought with regards to compliance of responsibilities in certifying annual returns or other documents.
The institute has received their replies and these are being examined by a core group.
The council of the institute has constituted a seven-member core group to examine the issues arising out of the Satyam episode and to suggest to the council the steps to be taken to strengthen the governance framework among corporates, changes in the legal policy framework, and other changes as the core group considers appropriate.
What kind of action would be taken against the erring members?
In case any member of the ICSI is found to be guilty, strictest punishment would be given to him, which would set an example.
Which part of draft Companies Act, 2008, which is before Parliament, are you uncomfortable with?
The Companies Bill, 2008, is a welcome step as it shows the government’s commitment to regulatory reforms. The Bill provides a modern structure for corporate regulation in India and represents a major reform statement by the government to promote the development of the corporate sector through enlightened regulations. The council of the institute is examining the Bill and preparing its views.
What would be the top-most priority for you as president of ICSI?
My priority would be to ensure that student services are more efficient. The institute has already implemented new syllabus. Now, new training template is being implemented. The institute has also set up the ICSI Students Education Fund Trust to provide financial assistance to economically backward students with good academic record.
With a view to spreading the reach of the CS course into remote areas and smaller towns, the institute had launched a web-based e-learning programme for the CS foundation programme. The response from the students has been encouraging. The modules for executive programme are being finalised and the same will be launched shortly. We expect that more students will register and make use of the e-learning facilities.
