NEW DELHI: Finance Ministry sources said The Pension Reforms Bill is likely to be adopted in the monsoon session. - PTI
PFRDA bill likely in monsoon session of Parliament
NEW DELHI: The pension reforms bill to set up a regulator and give more freedom to subscribers for investing their retirement money is likely to be tabled in the monsoon session of Parliament, Finance Ministry sources said on Tuesday.
“Amendments are ready. Hopefully, it would be tabled in the upcoming monsoon session of Parliament,” the sources said.
The Pension Fund Regulatory and Development Authority Bill (PFRDA) was introduced by the Finance Minister Mr P Chidambaram way back in 2005 to replace the ordinance promulgated in 2004 for setting up the regulator.
The bill was referred to the Parliamentary Standing Committee after the Left parties opposed the legislation. The standing committee recommended the bill with some modifications.
But the amended bill could not be tabled in Parliament due to persistent opposition from the Left. - PTI
Wednesday, August 06, 2008
SEBI OPENS ESOPS TO NOMINEE DIRECTORS
The Securities and Exchange Board of India (Sebi) on Tuesday made this amendment after it received several cases after a grey area in the regulation led to institutions forbidding nominee-directors from receiving Esops.
However, the joy of the nominee-directors could be short-lived as sources in Life Insurance Corporation (LIC) and General Insurance Corporation (GIC), which have a substantial shareholding in many large Indian companies, said they would not allow nominee-directors to accept Esops since they were government-owned bodies.
A GIC official said no government institution will allow nominee-directors to take Esops. “There will be a clamour to be on the boards of good companies if we allow this,” he said.
Before the amendment to the Sebi (Employee Stock Option Scheme and Employee Stock Purchase Scheme) guidelines, 1999, Esops were meant for whole-time directors, employees and officers of an organisation. Exempt categories were promoters or directors with over 10 per cent holding in the company.
Last year, there was a two-month face-off between LIC and GIC and their nominee directors, B P Deshmukh and Kranti Sinha, on the board of Larsen and Toubro (L&T) after the nominee-directors refused to return shares allotted to them by the construction major in spite of directions by both the institutions that its nominees should not accept any Esops. Sinha and Deshmukh held 20,000 and 30,000 L&T shares, the market price of which was Rs 3.5 crore and Rs 5 crore, respectively, at the time.
The two financial institutions moved the Bombay High Court to bar their nominee directors from dealing in these shares. Both directors lost their jobs on the L&T board. The matter was later settled out of court after the former directors returned their employee stock option shares to the company. After this, all financial institutions that hold equity stakes in various companies had written to them asking them not to issue Esops to their representatives to avoid a similar situation.
“Granting Esops is important for companies in terms of incentivising directors since companies are trying to create good governance on the board. Companies also need to look at shareholder interest and shareholder expectation. Obviously, the institution nominating the individual to the board should be comfortable with this,” said Jamil Khatri, executive director at KPMG.
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However, the joy of the nominee-directors could be short-lived as sources in Life Insurance Corporation (LIC) and General Insurance Corporation (GIC), which have a substantial shareholding in many large Indian companies, said they would not allow nominee-directors to accept Esops since they were government-owned bodies.
A GIC official said no government institution will allow nominee-directors to take Esops. “There will be a clamour to be on the boards of good companies if we allow this,” he said.
Before the amendment to the Sebi (Employee Stock Option Scheme and Employee Stock Purchase Scheme) guidelines, 1999, Esops were meant for whole-time directors, employees and officers of an organisation. Exempt categories were promoters or directors with over 10 per cent holding in the company.
Last year, there was a two-month face-off between LIC and GIC and their nominee directors, B P Deshmukh and Kranti Sinha, on the board of Larsen and Toubro (L&T) after the nominee-directors refused to return shares allotted to them by the construction major in spite of directions by both the institutions that its nominees should not accept any Esops. Sinha and Deshmukh held 20,000 and 30,000 L&T shares, the market price of which was Rs 3.5 crore and Rs 5 crore, respectively, at the time.
The two financial institutions moved the Bombay High Court to bar their nominee directors from dealing in these shares. Both directors lost their jobs on the L&T board. The matter was later settled out of court after the former directors returned their employee stock option shares to the company. After this, all financial institutions that hold equity stakes in various companies had written to them asking them not to issue Esops to their representatives to avoid a similar situation.
“Granting Esops is important for companies in terms of incentivising directors since companies are trying to create good governance on the board. Companies also need to look at shareholder interest and shareholder expectation. Obviously, the institution nominating the individual to the board should be comfortable with this,” said Jamil Khatri, executive director at KPMG.
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INDIA TO CONVERGE WITH IFRS BUT NOT TO ADOPT IT
‘India to converge with IFRS but not adopt it’
Indications are that the country would retain the right to remain sensitive to local conditions. .
Our Bureau
New Delhi, Aug. 2
India will go in for convergence with the International Financial Reporting Standards (IFRS) in an organised manner though it will not “adopt” this numero-uno accounting framework, a top Government official said here today.
Indications are that the country would retain the right to remain sensitive to local conditions. Currently, India does not follow IFRS, but its national GAAP (Generally Accepted Accounting Principles) is inspired by IFRS. More than 100 countries require or permit IFRS.
IFRS, which is principles-based, has now been required or permitted in more than 100 countries across the world. The application of IFRS requires increased use of fair value for measurement of assets and liabilities.
“The issue of full convergence with IFRS is closely followed by Ministry of Corporate Affairs (MCA). We are however distinguishing between full convergence and outright adoption. Yes we are doing it (converging) but we will not adopt. Because the moment you adopt IFRS, it is not question of adopting as it is today. It is a question of accepting any changes which would come. This is something that is not acceptable to us,” Mr Anurag Goel, Secretary, MCA, told at a seminar organised by PHD Chamber of Commerce and Industry (PHDCCI).‘Full convergence’
Mr Goel highlighted that “full convergence” was not a simple job and that there were hurdles and impediments in achieving it.
The MCA official said there was a need to ensure that the process of convergence took into account consistency with the legal and regulatory requirements. This complex task of convergence called for partnership among all stakeholders, Mr Goel noted.
While stressing the need to frame and revise laws in consultation with National Advisory Committee on Accounting Standards (NACAS), Mr Goel said company managements should be educated about the importance of impending transition.
In the light of the impending convergence with IFRS, Mr Goel urged various regulators – RBI, SEBI and IRDA – to develop their respective regulatory requirements for preparation and disclosure of financial statements of the entities regulated by them.
Indications are that the country would retain the right to remain sensitive to local conditions. .
Our Bureau
New Delhi, Aug. 2
India will go in for convergence with the International Financial Reporting Standards (IFRS) in an organised manner though it will not “adopt” this numero-uno accounting framework, a top Government official said here today.
Indications are that the country would retain the right to remain sensitive to local conditions. Currently, India does not follow IFRS, but its national GAAP (Generally Accepted Accounting Principles) is inspired by IFRS. More than 100 countries require or permit IFRS.
IFRS, which is principles-based, has now been required or permitted in more than 100 countries across the world. The application of IFRS requires increased use of fair value for measurement of assets and liabilities.
“The issue of full convergence with IFRS is closely followed by Ministry of Corporate Affairs (MCA). We are however distinguishing between full convergence and outright adoption. Yes we are doing it (converging) but we will not adopt. Because the moment you adopt IFRS, it is not question of adopting as it is today. It is a question of accepting any changes which would come. This is something that is not acceptable to us,” Mr Anurag Goel, Secretary, MCA, told at a seminar organised by PHD Chamber of Commerce and Industry (PHDCCI).‘Full convergence’
Mr Goel highlighted that “full convergence” was not a simple job and that there were hurdles and impediments in achieving it.
The MCA official said there was a need to ensure that the process of convergence took into account consistency with the legal and regulatory requirements. This complex task of convergence called for partnership among all stakeholders, Mr Goel noted.
While stressing the need to frame and revise laws in consultation with National Advisory Committee on Accounting Standards (NACAS), Mr Goel said company managements should be educated about the importance of impending transition.
In the light of the impending convergence with IFRS, Mr Goel urged various regulators – RBI, SEBI and IRDA – to develop their respective regulatory requirements for preparation and disclosure of financial statements of the entities regulated by them.
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