THE HINDU Editorial Vocabulary - July 17, 2018 - Topic 1
Overdue
correction: on revisiting the Companies Act
The Centre has announced the constitution of a
committee to revisit several provisions of the Companies Act, 2013 that
impose stiff penalties and, in some cases, prison terms as well, for directors
and key management personnel. The 2013 law entailed the first massive overhaul
of India’s legal regime to govern businesses that had been in place since 1956
and was borne of a long-drawn consultative process. Now, this 10-member
committee appointed by the Corporate Affairs Ministry has been tasked with
checking if certain offences can be ‘de-criminalised’.
The panel, which
includes top banker Uday Kotak, has been given 30 days to work out whether some
of the violations that can attract imprisonment (such as a clerical failure by
directors to make adequate disclosures about their interests) may instead be
punished with monetary fines. It will also examine if offences punishable with
a fine or imprisonment may be re-categorised as ‘acts’ that attract civil
liabilities. Importantly, the committee has also been asked to suggest the
broad contours for an adjudicatory mechanism that allows penalties to be levied
for minor violations, perhaps in an automated manner, with minimal discretion
available to officials. In fact, some of the provisions in the law are so tough
that even a spelling mistake or typographical error could be construed as a
fraud and lead to harsh strictures.
The government hopes such changes in the
regulatory regime would allow trial courts to devote greater attention to
serious offences rather than get overloaded with cases as zealous officials
blindly pursue prosecutions for even minor violations. The decision to build in
harsh penalties and prison terms for corporate misdemeanours in the 2013 law
was, no doubt, influenced by the high-pitched anti-corruption discourse that
prevailed in the country at that moment in time. Apart from several cases of
crony capitalism that had come to light during the second UPA government,
massive corporate frauds reported at once-revered firms such as the erstwhile
Satyam Computer Services had spooked investors and other stakeholders about the
credibility of corporate India’s books and governance standards. When the NDA
came to power in May 2014, a comprehensive review of the Companies Act was at
the top of industry’s wish list as a means to revive the economy. Industry
captains had red-flagged the impact of such provisions on the ease of doing
business, and investor sentiment in general. A trust deficit between industry
and government owing to stray incidents of corporate malfeasance should not
inhibit normal business operations, they had argued. Four years down the line,
the government is finally moving purposefully on this, a rethink perhaps
triggered by the fact that private sector investment is yet to pick up steam
and capital still seeks foreign shores to avoid regulatory risks. One hopes
this is followed up on swiftly, before the ruling party slips into election
mode.
Vocabulary
Provisions: the
action of providing or supplying something for use.
Example: New
contracts for the provision of services
Synonyms: supplying, supply, providing, giving, presentation, donation, equipping
Entailed: involve
something as a necessary or inevitable part or consequence.
Example: A
situation that entails considerable risks
Synonyms: involve, necessitate, require, need, demand, call
for, mean, imply
Offences: a
breach of a law or rule; an illegal act.
Example: Neither
offense violates any federal law
Synonyms: crime, illegal/unlawful
act, misdemeanor, breach of the law, felony
Imprisonment: the
state of being imprisoned; captivity.
Example: He
was sentenced to two months' imprisonment
Punishable: subject
to a judicial punishment.
Example: A
criminal offense punishable by up to three years in jail
Synonyms: illegal, unlawful, illegitimate, criminal, felonious, actionable, indictable
Perhaps: used
to express uncertainty or possibility.
Example: Perhaps
I should have been frank with him
Synonyms: maybe, for
all one knows, it could be, it may be, it's
possible, possibly
Regime: a
system or planned way of doing things, especially one imposed from above.
Example: Detention
centers with a very tough physical regime
Synonyms: system, arrangement, order, pattern, method, procedure, routine, course
Discourse: written
or spoken communication or debate.
Example: The
language of political discourse
Synonyms: discussion, conversation, talk, dialogue, conference, debate, consultation
Comprehensive: complete;
including all or nearly all elements or aspects of something.
Example: A
comprehensive list of sources
Malfeasance: wrongdoing,
especially by a public official.
Example: This
would occur whenever the public is made aware of official malfeasance or
incompetence.
Inhibit: hinder,
restrain, or prevent an action or process
Example: Cold
inhibits plant growth
Synonyms: impede, hinder, hamper, discourage, interfere
with, obstruct
