Irani panel told to draft law to protect small investors

NEWDELHI: Company affairs minister Prem Chand Gupta on Monday asked the JJ Irani Committee to distinguish companies with a substantial public interest from purely private firms and prescribe a separate legal regime for the former to protect small investors’ interests.

The move assumes significance as it comes in the wake of the Reliance ownership dispute, where more than 30 lakh investors have parked their money in the country’s largest private sector company.

According to an official statement, Mr Gupta also recommended that the committee advise the government on the new company law, and revisit the penal provisions to evolve a system, which is a real deterrent to international wrongdoers.

At the same time, those who breach certain procedural provisions unintentionally should be spared of unnecessary harassment, the statement quoted the minister as saying.

Addressing industry bodies’ concerns that overlapping jurisdiction of various regulatory agencies on certain aspects would increase the cost of compliance, the minister asked the committee to evolve a “harmonious framework.�

The ministry would shortly circulate the concept rules too among the committee members, which include independent experts, industry associations and other stake holders.

Sources said considering the volume of work and a three-month deadline, the committee has decided to meet quite frequently. They also suggested that the final framework could vary substantially from the concept paper, considering the varied nature of suggestions received.

The statement said the objective is to make a simple, easy to interpret law with emphasis on self-regulation, strict compliance and transparency through proper disclosure and corporate governance.