Email
Print
ShareHyderabad: The Big Brother's watching. Or, so the government would have the corporates believe.
The corporate affairs ministry has gone online with the MCA 21 system, where the companies file all their documents online. This system is now being honed to create an early warning system, ostensibly to prevent another Satyam-like fiasco, corporate affairs minister Salman Khurshid said on the sidelines of the 37th annual conference of the Institute of Company Secretaries of India on Thursday.
"We have always been told that we wake up only when something goes wrong. We are trying to use the digital and online filing through MCA 21 and see if there is a pattern of behaviour, which indicates things possibly going wrong in a particular sector. We tried to isolate certain features that might indicate the things going wrong. There might be an exceptional good performance, unusual circumstances or prevailing conditions, but at least it will require a special look by the ministry. We can give an early warning to ourselves and to the company on something going wrong and alert them on being watchful," said Khurshid.
The government will select about 15 parameters to keep track of the companies and any unusual movement in these parameters would trigger an alert, making the ministry officials seek additional information from the companies to assess the reasons for the unusual behaviour.
Does this mean another round of harassment for the companies?
The minister said the early warning system need not always be to find fault with the companies. "It is not a question of another round of survey. Everything is available with us (through MCA 21). If there is any thing indicating some unusual activity, we can ask or tell them (the companies) that there is some unusual activity. Everything we ask need not necessarily to find some fault. It might as well be for some good. We might as well congratulate the company for achieving a good performance. It is not surveillance. Even after having information with us through MCA 21, we periodically ask for information from the companies through the regional offices and the RoCs. But, when should we be asking for information is the question. We are putting a scientific base to the process of asking that information," he said.
Khurshid preferred to revisit the issue of remuneration to directors and CEOs, which has been a key issue of debate in India Inc. Currently, there is a regulation capping the remuneration to directors at 11% of the net profit.
"I find some sense of distress. We in this country are still unable to debate and discuss issues with rationality and composed behaviour that we deserve to. Often, issues arise and an issue arose recently when I spoke about remunerations."
"Remunerations are central to the structure of corporate India," he said. "I was surprised to see the debate on remuneration happening without anyone pointing to us asking if we can remove the 11% cap. Not one person said to us about the cap. The draft bill has no cap.
Reliance Industries chairman Mukesh Ambani came in for praise from Khurshid. "The decision taken by Mukesh Ambani is applaudable. He took a cut of about 60%. It was austerity. It is a decision taken today. Austerity is not permanent. Though specifics of austerity may not be permanent, the attitude of austerity has to be permanent."
According to Khurshid, it is for the shareholders to decide the quantum of remuneration; the effort of the government was only to provide the required information to the shareholder to allow him to take a proper decision on the issue.
