Industry raises voice against independent director norms in unlisted companies
The Modi government plans to identify the areas of correction and review in the rules of the Companies Act, 2013, for the smooth implementation of the new legislation, Corporate Affairs Secretary Naved Masood said here on Saturday.
Mr. Masood also clarified that the legislation itself was open to amendments where the difficulties were serious enough to warrant such a course of action. He was speaking at an interactive session on the implementation of the Companies Act, 2013, organised by the National Foundation for Corporate Governance.
Industry has raised a range of issues with the new corporate governance stipulations that came into effect on April 1. This includes the imposition on a large number of unlisted companies of the compliance requirements regarding independent directors. According to the rules, by April 1, 2015, besides all listed companies, unlisted public companies with either share capital of Rs.10 crore or more or turnover of Rs.100 crore or more or outstanding loans in excess of Rs.50 crore too have to appoint independent directors. “The requirement is excessive for non-listed public companies that do not use public money,” partner in an Ernst & Young firm Dolphy D’souza told The Hindu.