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Govt to repromulgate ordinance to allow companies to buy back shares

The Union Cabinet has decided to re-promulgate the Companies (Amendment) Ordinance 1998 with some appropriate modifications.

The ordinance seeks to allow companies to buyback their own shares, to provide for nomination facility to the holders of shares and debentures, to include Infrastructure Development Finance Company Limited as a public finance institution.

As the enactment of the Companies Bill would take some time, the Cabinet has approved a few amendments of urgent nature of the Companies Act, 1956 and also decided that these changes may be introduced through promulgation of an ordinance, 1998 (no 19 of 1998) that has been promulgated by the President of India in October.

Keeping in view the need to take care of suggestions made from time to time, the Cabinet approved certain changes at its meeting held on December 16 and accordingly the Companies (Amendment) Bill, 1998 was introduced in the Lok Sabha. This bill, however, could not be passed in the Lok Sabha.

This is intended to give a fillip both to the capital market and to promote investors' confidence. The economy also needs certain impetus for promoting inter-corporate investments. The Companies (Amendment) Ordinance, 1998 was to lapse on January 10.

UNI

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