New Delhi : The Indian cabinet Thursday approved a revised Companies Bill to replace the 55-year-old old legislation that seeks to tighten norms on insider trading, prevent corporate frauds and introduce new concepts like class action suits.
A cabinet meeting presided over by Prime Minister Manmohan Singh also decided to table the bill during the current winter session of parliament, officials told reporters said after the meeting Thursday evening.
The legislation, which will replace the Companies Act, 1956, has also proposed steps to prevent corporate frauds like the one perpetrated by the original promoters of Satyam Computer that was discovered in January 2009, running into a whopping $1.43 billion.
The Companies Bill, 2008 had lapsed with the dissolution of the 14th Lok Sabha. It was reintroduced in the Lok Sabha in August, 2009. Approval from the Parliamentary Standing Committee on Finance came in August this year.
Some of the salient feature of the revised Companies Bill 2009 are:
* Provision for filing class action suites by a larger group of stakeholders
* Makes insider trading a criminal offense with minimum Rs.1 crore penalty
* Stringent norms for companies inviting public deposits
* Auditors to have two fix terms of four years each
* Stricter norms for independent directors
* More powers to Serious Fraud Investigation Office