New Delhi: The Biju Janata Dal Thursday warned the Centre of the consequences of amendments proposed under the Companies (Amendment) Bill 2016 which have led to losses to companies leading to insolvency.
Vijay Mallya is only a bi-product of such unpragmatic legislations which threaten to procreate more clones of Mallyas, stated Cuttack MP Bhartruhari Mahtab (BJD) Thursday.
Mahtab told the Lok Sabha that the Companies (Amendment) Bill 2016 lacks provisions to fix onus on directors responsible for losses suffered by a company. It also empowers independent directors to get personal entitlements from the company.
Mahtab warned the House that such situations can lead to recurrence of the infamous Vijay Mallya-like incidents when the directors are showered boons and the burden of losses dumped on the shareholders.
“The bill allows pecuniary gains to independent directors who are entitled to 10 per cent of personal benefits at the cost of the company. This provision could be misused,” Mahtab said.
He said even if a company and stakeholders suffer losses, the directors can have lavish lives. “Govt has violated the privacy of individuals but promoted anonymity for corporates. The directors are not liable for losses and the burden is shifted to shareholders. Something is really wrong with this and needs rectification,” Mahtab added.
Expressing concerns over the misuse of existing laws, Mahtab said, “We have seen fly-by-night companies. We have seen firms created for plantation did not plant a single sapling despite funds flow. This had been a concern for the citizens as to why the government has not been doing anything on this front.”
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