CORPORATE ACTIONS & REGULATORY MECHANISM Dr Navrang Saini Regional director (E&NER), MCA, INDIa
ADMINISTRATIVE SET-UP Three tier organizational set-up The Secretariat at New Delhi Six Regional Directors at Mumbai, Kolkata, Chennai, Noida (UP), Ahmedabad, and Hyderabad 23 Registrar of Companies in States and Union Territories, 19 offices of the Official Liquidators attached to various High Courts
REGULATORY MECHANISMDirector Identification Number (DIN)–Issued online Centrally by the Ministry Applied 35,57,247 Verified 19,67,035 Approved 14,29,048 Rejected 5,35,179
APPROVALS BY ROCDSC based e Filing Name 6,00,508 Incorporation 4,16,777 Change of Name & Status 46,727 License for Non-Profit Org. 1,858
APPROVALS BY ROC Extn. for holding AGM 34,290 Extension for Financial Year 4,689 Registration of other documents 1,62,97,071 (filing of Balance Sheets of select class of companies in XBRL – 23,629 once implemented completely, data mining will be more easy and effective)
REGIONAL DIRECTORApprovals : Under Section 297- Related party transactionsDirections : For change of Name u/s. 22 For removal of Auditor u/s. 224Compounding of offences u/s 621ARepresents :Central Govt. by way of filing Affidavit in the
CENTRAL GOVERNMENT Approvals - For appointment of Managerial Personnel in certain cases For approval of managerial remuneration exceeding the prescribed limit in Schedule-XIII of the Act Approval for modification as to contents of Balance Sheet (Exemption from disclosing quantity details) Approval for appointment of Sole Selling Agents (Bulk Drugs & Pharmaceuticals)
CENTRAL GOVERNMENT Approval for acquisition / transfer of shares by or to, an individual, firm group constituent of a group, body corporate(s) under the same management in relation to dominant undertaking provided there is any increase in dominance Payment of Dividend out of Reserves [section 205A (3) in case of inadequacy or absence of profits in any year and not in accordance with rules] Loans to Directors and Relatives (section 295) Amalgamation of Government Companies Reduction of Share Capital (u/s. 101) Further issue of Share Capital Power to declare special type of NBFC as “Nidhi Companies” or Mutual Benefit Societies
COMPANY LAW BOARD The Company Law Board has been functioning as an independent quasi judicial body w.e.f. 31.05.1991 set up by the Central Government u/s. 10E of the Companies Act, 1956.
COMPANY LAW BOARD During the period from 1st April, 2010 to 31st December, 2010 13,651 petitions/ applications were considered under various sections 7,313 petitions/ applications were disposed off. Section 397/398 provides for filing of application before Company Law Board for relief in cases of oppression, mismanagement or apprehension of mismanagement of the affairs of the Company.
COMPANY LAW BOARD Section 408 of the Act empowers the Central Government to appoint such number of persons on the Board of the company as directed by Company Law Board on the reference/ application made by the Government to safeguard the interest of the company or its shareholders or the general public. In addition, the Central Government can also file petitions under Section 402 read with Section 406 of the Act for disgorgement of assets against the Directors of the Company when they indulged in misappropriation/ misfeasance.
THE COMPETITION COMMISSION OF INDIA (CCI) The Competition Commission of India (CCI) has the power to regulate mergers or combinations and to reverse mergers or combinations if it is of the opinion that a merger or combination has or is likely to have an ‘Appreciable Adverse Effect’ (AAE) on competition in India. The Competition (Amendment) Act, 2007 has mandated pre-merger clearance from CCI to ascertain whether a ‘combination’ has an ‘AAE’ on competition within India. Combinations include mergers, amalgamations and acquisition of control, shares, voting rights or assets.
CCI As on 31st December, 2010 matters pending (including number of matters pending at the beginning of the year) -144 out of which prima-facie violations were noticed in -94, no prima-facie violations were noticed in 50 matters investigation reports were received on prima-facie matters - 63 enquiries were conducted in 31 numbers of matters.
PROSECUTION During the period from 01.04.2010 to 31.12.2010, a total no. of 63,602 prosecutions including 60,661 prosecutions brought forward from the previous year were launched and pursued in various courts under the Companies Act, 1956. During this period 3,845 prosecutions were disposed off. As on 31.12.2010, the number of pending cases stood at 60,457.
ENFORCEMENT MECHANISM Scrutiny of documents filed with ROC (by ROC) under section 234 of the Act Inspection under section 209A of the Companies Act, 1956 by the office of Regional Director or by the Officers of ROC (168 inspections conducted during the period 1.4.2010 to 31.12.2010) Investigation by SFIO (So far, 79 cases have been referred to SFIO for investigation. Out of these, SFIO has submitted investigation reports in 52 cases till 31.12.2010)