'Web firms not being under Companies Act a concern'

While there are many laudable features in the new Companies Act, the absence of any provision to bring Internet-based companies based out of India within the ambit of the Act is a drawback, according to company secretary V Sreedharan, who was speaking at a meet organised by the FKCCI on Tuesday.

Sreedharan said that such instances have cheated the public in the past and managed to remain untraced. This is an issue that needs to be addressed, he said.

On the government tightening section 25 of the Act, he said that it was due to misuse of the section by certain companies. On the whole, he said that the focus on self-regulation, reducing number of approvals, were welcome from a business perspective.

On the role of auditors, he said that it is difficult to define “material fraud” as there is no index to indicate it.

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