Company Law governance calls for overhaul

The proposed takeover of the beleaguered Satyam by Tech Mahindra in a record 100 days has removed the impression that Indian Company Law is ineffective. In this case, all the constituents which had to administer Company Law played on effectively. The result was a feat of sorts! It is not the Company Law as such that is ineffective in all cases; it is its administration that is ineffective in most cases. The Companies Bill 2008, except for its over arching obsession with cutting down the size of the extant company law, did not have any big ideas; the Companies Act, 2006 of the U.K. has in fact increased the size of the Act to 1300 sections and 16 schedules. Had Companies Bill 2008 been enacted into law, the intensity of Company Law and corporate governance regulation would have stood considerably diluted. Companies Bill 2008 is the third abortive attempt to recodify Company Law in this country in a span of two decades.