New Companies Bill & SEBI Ordinance: Hope,Hype & Horror  

September 6, 2013

The new Companies Bill and the Ordinance to amend the SEBI Act will create a monumental combined impact. Will the average saver benefit?

Sucheta Dalal, Debashis Basu &Jason Monteiro

Some 50 years after independent India enacted the Companies Act, a new Bill is ready to deliver a new and modern statute. Separately, exactly 25 years after India got its first securities regulation, major changes have been brought about in the Securities & Exchange Board of India Act (SEBI), through a Ordinance, empowering it with enormous additional powers. But which provisions of these two major legislative changes are relevant to us, ordinary savers and investors? Moneylife Foundation organised a seminar to discuss this issue with Jayant Thakur, a chartered accountant who specialises in companies’ and securities’ laws, and Savithri Parekh, head of legal & secretarial, Pidilite Industries. What emerged from the discussion was that many provisions of these two statutes create a lot of hope, but some of it could end up being just hype. Most importantly, many provisions will horrify right-thinking people due to their broad sweep and draconian implications. These have not been discussed fully and frankly.

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