Companies Act Current Affairs - 2019
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The Investor Education and Protection Fund (IEPF) Authority in a major success has recovered deposits worth Rs 1,514 crore from Kolkata-based Peerless General Finance and Investment Company. This money of depositors was pending with the company for the last 15 years.
Investor Education and Protection Fund Authority
- Investor Education and Protection Fund (IEPF) was established by the central government under Section 125 of Companies Act 2013.
- It is a statutory body established under the Ministry of Corporate Affairs.
- The Secretary in the Ministry of Corporate Affairs is the Chairperson of IEPF.
- The authority aims to administer the Investor Education and Protection Fund with the objective of promoting Investor’s Education, Awareness and Protection.
- It is empowered to undertake various initiatives to fulfil its objectives through Investor Awareness Programmes and various other mediums like print, Electronic, Social Media and Community Radio.
Further to enhance its reach, the IEPF Authority is also in the process of commissioning an online facility to collect primary information directly from retail investors about the deposits which have matured and are still pending with various entities for repayment or payment of interests.
In an affidavit filed before the Supreme Court, the Election Commission of India has made the following observations:
- Electoral bonds, contrary to government claims, wreck transparency in political funding.
- Electoral bonds coupled with the removal of the cap on foreign funding invites foreign corporate powers to impact Indian politics.
- Electoral bonds would cause a “serious impact” on transparency in the funding of political parties.
The Election Commission of India further criticises amendments made to various key statutes through the two consecutive Finance Acts of 2016 and 2017.
What were the amendments made?
The Finance Act of 2017 amends various laws, including the Representation of the People Act of 1951, the Income Tax Act and the Companies Act. The Finance Act of 2016 makes changes in the Foreign Contribution (Regulation) Act of 2010.
The amendment to Representation of the People Act allows political parties to skip recording donations received by them through electoral bonds in their contribution reports to the ECI.
The amendments introduced to the Income Tax Act allow anonymous donations. Donors to political parties are not required to provide their names, address or PAN if they have contributed less than Rs. 20,000. The Election Commission notes that many political parties have been reporting a major portion of the donations received as being less than the prescribed limit of Rs. 20,000.
The Finance Act of 2016 allowed donations to be received from foreign companies having a majority stake in Indian companies.
Observations by Election Commission
The Election Commission of India called these measures as a retrograde step and the ECI has no way to ascertain whether the donations were received illegally by the political party from government companies or foreign sources.
The Election commission also expressed concerns that these amendments would pump in black money for political funding through shell companies and allow unchecked foreign funding of political parties in India which could lead to Indian politics being influenced by foreign companies.
Tags: Black Money • Companies Act • ECI • Election Commission of India • Electoral bonds • Finance Act 2016 • Finance Act 2017 • Foreign Contribution (Regulation) Act 2010. • Income Tax Act • PAN • Political Funding • Representation of the People Act 1951 • Shell Companies • Supreme Court