Highlights of the Bill
Key Issues and Analysis
- The composition and powers of the National Company Law Tribunal are similar to those introduced by a 2002 amendment to the Companies Act. The constitutional validity of that amendment is being examined by the Supreme Court.
- The Bill permits certain financial relationships between independent directors and the company, which can lead to conflicts of interest.
- Some provisions in the Bill, such as those covering independent directors and the delisting of companies, conflict with provisions under the SEBI Act and its regulations.
- The Bill provides for a number of issues currently specified in the Act, to be specified by the government in the rules. The government has not issued draft rules to the Bill so the impact of any possible change cannot be estimated.
- Fines have been increased and the range of offences which are punishable by imprisonment has been widened. The Bill does not require proof of intent to commit an offence as a condition for criminal prosecution. This differs from the recommendation of the Irani Committee.
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