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Draft rules and future of CS. Much ado about nothing

Rohit Jain  
on 05 April 2014

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The Institute of company secretaries of India is one of the largest professional bodies in the world in the development of corporate secretaryship. One does not need to repeat that the companies act 2013 has thrust the company secretary to the position of  key managerial personnel in the company. The whole corporate law mechanism in India is undergoing rapid changes and winds of change are blowing everywhere.

With the passage of time the ministry of corporate affairs is passing various regulations, rules and circulars under the wider gamut of companies act 2013. All major sections of the companies act and rules thereunder have been notified and brought into effect step by step.

In the rules relating to the appointment of key managerial personnel and appointment of company secretaries, there have been some changes which are seen and are being considered as extremely negative by students, practitioners and professionals related to company secretary course.

Social media is a mixed platform. While one can gain immensely from it, it is equally easy to spread misconceptions, false facts and unnecessary rumors.

Many company secretary related groups on facebook seem to be involved in the same game. Most of the people there only seem to seek any opportunity to write bad about icsi and the profession. Here are some wrong facts doing rounds on facebook. One has to take a holistic view regarding all the surrounding circumstances before arriving hastily on a conclusion.

1) The present draft rules, especially regarding the appointment of company secretaries will mean that hundreds of company secretaries shall remain unemployed.

Some people on social media and blogs are like a army general who presses panic button when any problem persists without looking into what the problem really is . The phrase that applies to them is the Chinese phrase ‘do not use a cannon to kill a mosquito’.

Agreed that the draft rules have curtailed the compulsions for appointment of a cs.

But is that the end? There are lot of new avenues opening up for company secretaries. One recent advertisement from blackrock, the world’s largest fund manager sought company secretaries as legal consultants and legal analysts. Many government companies are willing and accept c.s qualification for the finance division either as a main or additional qualification.

One cannot be directly appointed as a Main company secretary and compliance professional in large company and therefore many freshly qualified c.s are recruited as assistant company secretaries or officers in the secretarial cadre. So even if there is a increase in capital threshold for appointment of a c.s that does not mean that c.s shall be out of job totally.

One golden avenue that can open for company secretaries is in the draft dtc bill 2010. If one reads the final standing committee report, the committee has given a go ahead for appointing company secretaries and cost accountants as financial and tax auditors. Whether this will materialize or not is a further question , but if it materializes won’t that be a great opportunity ? When the next government comes into power , the dtc bill will again come into the forefront and if one assumes bjp victory in elections then there is fair chance that the dtc bill will be accepted in the 2010 format as it was prepared / advised by Mr. Yashwant Sinha , a prominent bjp leader (this will not be easy though as the icai will oppose it to the maximum limit possible ….. but that does not mean that if one is not a chartered accountant then he does not know finance or taxation.)

2) Appointment of company secretary should be compulsory for all companies beyond a threshold.

In a free market economy market forces determine everything and ours is the same. Law making is an activity of collective discussion and bargaining and various stakeholders are involved in the process. As we all are familiar, there are industry bodies, law councils and industrial bodies who together suggest and demand certain points in legislation.

Companies cannot be forced with burden of unnecessary compliances especially when smaller companies have to face cut throat global competition and some are on the brink of collapse. Forcing something upon the people in democracy is not acceptable.

Therefore its upon the company secretaries themselves to enhance their efficiency and usefulness so that even if there is not a compulsion, every company should itself feel that it needs and in fact it’d be in a better and superior position if it itself appoints a company secretary.

I Read a person commenting on facebook ‘agar Gandhi ke method se nahi mante to bhagat singh approach use karo’. How absurd? Are this the kind of reactions a professional should make. Certainly not.
 

Therefore to conclude, the recent discussions on the fate of entire cs fraternity is nothing but a much ado about nothing.


Rohit Jain

https://www.facebook.com/rohitnashik


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