As a Bill to amend the Companies Act 2013 and decriminalise various offences under it was introduced in Lok Sabha on Tuesday Opposition members of various parties said that the Government was decriminalising corporate offences on the pretext of ‘ease of doing business’ and not looking after the interest of common investors while protecting big businessmen by reducing penalties.
Bhartruhari Mahtab (BJD) said the Government was giving banks a long rope in the “guise” of ease of doing business and “reducing penalties” when “banks are failing”. This , he said, would encourage criminals. Mahtab said the Act has been amended repeatedly which reflect an “adhoc approach” of the Government.
Questioning the timing of introduction of the Bill, the BJD MP asked, “Is this an opportune time to introduce the Bill when a large private bank has collapsed?”
On March 5, the Reserve Bank superseded the board of Yes Bank in the wake of deepening crisis, mainly due to huge bad loans and a moratorium has been imposed. Under a revival plan, SBI and some private banks have made investments in Yes Bank.
Many companies are folding up because of the activities of promoters, Mahtab said.
Sauguta Roy (TMC) said the Government was influenced by industry in amending the companies act. “Today (former) CEO of Yes Bank is in Enforcement Directorate custody...The Government is seeking to decriminalise certain regulations in the name of ease of doing business,” Roy said.
Yes Bank co-founder and former CEO Rana Kapoor is in ED custody. Backing TMC and BJD members, Congress leader of the House Adhir Ranjan Chowdhury said the Government can be “identified as by the corpoates... for the corporates”.
He claimed that the Government is diluting Corporate Social Responsibility (CSR) norms to help the corporate sector.
Manish Tewari (Congress) said Government was seen to be with defaulters rather than with the small investors . He also said that people were “losing confidence in banking sector.”
Introducing the bill, Minister of State for Finance and Corporate Affairs Anurag Thakur made it clear that the Government was not looking to decriminalise non-compoundable offences which include frauds and injury to the public.