Cabinet clears Companies Bill

The Bill is likely to be  tabled in the current session of Parliament. The Bill, which is already been vetted by the Parliamentary Standing Committee on Finance, has for the first time, introduced ideas like Corporate Social Responsibility (CSR), class action suits and a fixed term for independent directors.

It also proposes to tighten laws for raising money from the public. Among other things, it seeks to prohibit any insider trading by company directors or other personnel and treats such activities as a criminal offence. The Bill has proposed that companies should earmark 2 per cent of the average profit of the preceding three years for CSR activities and make a disclosure to shareholders about the policy adopted in the process.