Agencies, New Delhi
Finance Minister P Chidambaram today said regulators should intervene only in cases of gross violations by companies or when there are clear cases of criminality so that they do not get over burdened.
Speaking at the Golden Jubilee celebrations here of the Central Vigilance Commission (CVC), Mr Chidambaram said the new companies law aims to ensure transparency, better disclosures and better accountability.
The Finance Minister said regulators or ‘an armed regulator’ must intervene only on the basis of ‘gross violation or gross excesses or if there is clear case of criminality.’
Mr Chidambaram remarked: ‘We must keep faith in self regulation’.
Stressing that compliance needs to be enforced, the Finance Minister said, in cases of deviations,faith must be put on the company’s board of directors and on shareholders to take action against those violating laws.
Speaking about the the new Companies Act, the Minister stressed on caution while exercising the powers.
‘’While I strongly support the structure of the new Companies Act, I would urge caution in the manner in which powers are exercised’’ he said.
‘’I reiterate, we must bring self regulation, we must enforce compliance, we need to heed to board of directors and shareholders and only in exceptional cases should regulator intervene to punish gross grave cases of proven criminality,’’ Mr Chidambaram said.
He new Companies Act,which was approved by Parliament last year, has various provisions to protect investor interests and to prevent corporate misdoings.
Later replying to queries by reporters, Mr Chidambaram said, ‘’We have a problem of corruption and we have to deal with it. The belief that India is most corrupt nation is completely wrong.’’