FICCI welcomes cabinet decision to decriminalise bona fide defaults

New Delhi: FICCI welcomes Cabinet’s decision to amend the Companies Act, 2013 to decriminalise bona fide defaults under the Act as well as permit Indian companies to list on stock exchanges in foreign jurisdictions.

Dr Sangita Reddy, President, FICCI said, “Overseas listing would pave the way for a liberalized regime promoting Indian economy on the global stage. Indian corporates will be able to access funds from deep and mature markets and scale their businesses further benefitting from reduction in the cost of capital and better valuations.”

FICCI believes that it will not only increase the competitiveness of the Indian industry, but also render strategic benefits such as improved governance practices, awareness of ‘Brand India’ and also allow Indian companies to pursue inorganic opportunities abroad. New-age companies will especially benefit through access to a large pool of institutional capital & investors who have deep experience in fast-growing technology sector and keen to invest.

Dr Sangita Reddy further added that FICCI looks forward to working closely with the Government for devising a framework that facilitates inflow of capital into the country.

Referring to the other amendment approved by the Cabinet yesterday, Dr Sangita Reddy lauded Government’s initiative to decriminalise non-compliances of minor, technical or procedural nature with an objective of facilitating and promoting ease of doing business and ease of living in the country.

She said that FICCI has been engaged with the Ministry of Corporate Affairs for removing criminality under the Act for inadvertent or procedural lapses, especially in the first instant. Rationalisation of penal provisions in the Act would increase the attractiveness of India as an investment destination and also provide relief to foreign investors from long-drawn judicial processes in cases of defaults. At the same time, FICCI is fully cognisant that serious non-compliances, wilful disregard of procedure or repeated misdemeanours, especially where public interest is concerned, need to be deterred and would continue to support this laudable initiative.