Speaking at the Golden Jubilee celebrations of the Central Vigilance Commission (CVC), Chidambaram said the new companies law aims to ensure transparency, better disclosures and better accountability. (Agencies)
"Regulator or an armed regulator must intervene and I urge that they do so only on the basis of gross violation or gross excesses or if there is clear case of criminality,” Chidambaram said.
“We must keep faith in self regulation,” he added.
The Finance Minister said that if any non-criminal deviation is investigated by the regulator, then that would overburden the regulator’s work and regulation will fail.
Noting that compliance need to be enforced, Chidambaram 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.
Referring to the new Companies Act, he stressed on taking 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. I reiterate, we must bring self regulation, we must enforce compliance, 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,” Chidambaram said.
The 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 questions, Chidambaram said the belief that India is most corrupt nation is completely wrong.
“We have a problem of corruption and we have to deal with it,” he said.
Speaking at the Golden Jubilee celebrations of the Central Vigilance Commission (CVC), Chidambaram said the new companies law aims to ensure transparency, better disclosures and better accountability.