The Govt increasing bench strengths of tribunals for faster disposal of Cos. Act matters: K.V.R. Murty 
| Dr. Sonali Mishra, Special Correspondent, IOP - 24 May 2020

Ministry received ‘hate mails’ from shareholders on recently issued circulars in wake of Covid-19 pandemic

We are making beginning in Delhi and Mumbai to start with where more than half of the incorporated companies in India are registered.

M&As (mergers and acquisitions) are going to be a huge indicator of how we are going to recover from Covid-19 pandemic

By Sonali Mishra

New Delhi, May 24, 2020: The Ministry of Corporate Affairs is increasing the bench strengths of the National Company Law Tribunals (NCLT) to expedite the disposal of Companies Act matters. This has become necessary because the Companies Act matters are taking longer time in the NCLT due to extraordinary burden of IBC (Insolvency and Bankruptcy Code) cases.

Mr K.V.R. Murty, joint secretary, Ministry of Corporate Affairs said this in an ASSOCHAM Regulators’ Web-Confluence on Corporate Restructuring, M&A and Joint Venture held on Saturday.

Mr Murty said, “We are also looking at options wherein we could identify benches specifically for IBC related and Companies Act related matters. We are making beginning in Delhi and Mumbai to start with where more than half of the incorporated companies in India are registered.”

He added, “So these are our focus cities to begin with and we would like to expand the capability and capacity of NCLT to handle high volume of cases along with having dedicated benches so that matters get listed and heard faster.”

He further said that combined with expanding the classes or the coverage of companies which can be handled through the fast track mechanism is the way to go forward. “If industry bodies could come up with some kind of white paper, self-contained comprehensive proposal to us also indicating there-in as to what is happening across various jurisdictions that will be a big help and it will cut down the timelines on formulating the suitable framework.”

Talking about the current scenario he said, “M&As (mergers and acquisitions) are going to be a huge indicator of how we are going to recover from Covid-19 pandemic.”

On the various steps taken by the Ministry of Corporate Affairs in wake of Covid-19 pandemic, Mr Murty said, “We were, I'd like to believe, the first ones of the block in so far as ministries and departments were concerned, when we came up with a circular on 24th March, the day the lockdown happened and then over the last two months so far we have issued 10 different circulars which have addressed various aspects of the functioning of the corporates. The big ones being how to enable companies to conduct their EGMs, AGMs and board meetings using digital methods.”

He however said that MCA had faced backlash on these recent measures. “We have been at the receiving end now for some hate mails from shareholders on those accounts, but then if the steps we take meet the legitimate requirements of the overwhelming majority of the stakeholders then we continue undeterred by that.”

He also said that merger and schemes of arrangement framework that is there in the Companies Act is not hugely different from what is followed in some of the best jurisdictions across the world. “But what I would probably think is that we would be willing to look at adding in more classes of companies to the existing ones covered under the fast track process in section 233 that is something we would like the industry bodies to work out some kind of a comprehensive, detailed proposal and share it with us and then we would like to extend it to more classes of companies to the 2-3 that are in existence today.”

Concluding his address Mr Murty said that while in a diverse and vast country like India you can never probably meet fullest aspirations and expectations of every stakeholder but the government tries to strike a healthy balance between corporate governance, shareholder interests as well as the requirements of compliance from the law point of view.

Amid others who shared their viewpoints on the related topics included - Mr Pawan Kumar, ED, IBBI; Mr M.M. Juneja, RD (West), MCA; Mr Jeeevan Sonparote, CGM, SEBI; Dr Girish Ahuja, central government nominate director on Board of SBI; Mr Girish Joshi, chief-trading operations, BSE; Dr Niranjan Hiranandani, president, ASSOCHAM; Mr Vineet Agarwal, senior vice-president; Ms Preeti Malhota, chairperson, National Council for Corporate Affairs, Company Law and Corporate Governance; Mr Pavan K. Vijay, chairman, M&A Task Force; Mr G.P. Madaan, co-chair and Mr S.C. Aggarwal, managing committee member, ASSOCHAM.

Representational File Image - KVR Murty, JS, MCA (Left) and Smt. MadhabiPuriBuch, Whole Time Member, SEBI (Right). Courtesy - PIB / ASSOCHAM FB Page

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