New norm for M&As, revamp of A/c standards shortly

NEW DELHI: In a bid to check corporate frauds and failures, Government would shortly revamp the accounting standards while plugging the loopholes in the norms for mergers and acquisitions, preferential allotment of shares, intercorporate deposits and related party transaction.
"The Naresh Chandra Committee has submitted its report and it has been put out for public comments. After considering some suggestions we will implement it", Department of Company Affairs Secretary V.K.Dhall said at an award ceremony organised by the Institute of Company Secretaries of India (ICSI) here today.
Referring to the Enron-Andersen fiasco, he said the government was now working on stringent norms for bringing greater accountability on auditors.
He said a group headed by eminent corporate lawyer Shardoul Shroff has been set up to suggest ways of bringing in transparency in valuation of assets during mergers and acquisitions.
Moreover, the government was thinking of tightening the norms for inter-corporate deposits as many companies had channelised funds raised through ICDs to invest in stock markets.
Dhall also pointed to the misuse of the norms on preferential allotment of shares and said the norms were relaxed to enable companies to offer stake to strategic investors. Instead, many companies were making preferential allotment to the brokers, he added,
He also drew attention to the gross misuse of norms on related party transactions saying corporates were showing very high price for acquiring business from their own overseas subsidiaries.