It is the time, when Institute of Company Secretaries of India is having Questionaries’ on Corporate Governance - 2011 and Period of Annual General Meeting of all companies and reports on Compliance matters. At that time, I thought to provide some shocking facts or Real Picture of Corporate Governance in India. (No wonder that all CS Professionals knows that In India, Corporate Governance is in books only).
As per Section 383A of The Companies Act, 1956, Appointment of Company Secretary is Compulsory in the companies having paid-up capital of more than Rs. 5 Crore or more, and As per Clause 47 of the Listing Agreement, Listed Company agrees to appoint Company Secretary as Compliance officer in the company.
But, very few people know that though the rules are compulsory in nature, still most of the companies are not appointing Company Secretary in the company (and MCA has not initiated any actions so far since years of Non-compliance. In Gujarat only, approximately 900 Companies have not appointed the Company Secretary, though Section 383A is applicable. The List of the companies non-complying with the section is attached herewith. (Read at your risk, you will get the names of Big Companies also).
If Gujarat has approximately 900 companies not complying with the provisions of Law, then there are possible chances that Total No. of Indian Companies not complying with the Section 383A will be more than Total No. of Company Secretaries (CS).
FYI: Gujarat has 1035 CS including (CS in employment, CS in Practice, Retired CS, Jobless CS, etc.) as per the Report of ICSI’s website.
Please Note that Ministry of Corporate Affairs has not officially published the attached List. But I have applied under the Right to Information Act for the List of Companies, who is in default of Section 383A of The Companies Act, 1956. At that time, Registrar of ROC - Gujarat has requested me to not to publish the List, But as Now he is in Jail for Bribe case, I don’t need to worry about him.
On the one hand Institute of Company Secretaries of Indian and Ministry of Corporate Affairs are talking about strict Corporate Governance and on the other hand they ignores the fact that, So many Companies are not complying with the Rules including so many reputed Listed Companies.
MCA can send the Notice for false certification by Professionals but It can’t send the notice for non-compliance of the Section 383A.
Ministry of Corporate Affairs is so much busy in the Implementation of Straight through processing system in all E-forms step by step and reporting of financial statements, It has totally ignored the fact that, who will be held responsible in case of Non-compliance of the hundreds of Laws.
Who will look after the compliance of hundreds of Laws?? Do they expect that Businessmen like Raja of Satyam will take care of compliance??
Company Secretary is the spinal cord of Corporate Governance, If he is not there, there will be zero chances of Proper implementation of Corporate Governance. (If he will be there, there is no surety e.g. G. Jayaraman, CS of Satyam Computers).
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