Shri Salman Khurshid, Minister for Corporate Affairs, has emphasized the need to make a comprehensive study of the investor mentality: that why a certain investor never returns to the market after making losses; why some others are totally wedded to the Stock Market; why many people choose to stay away from the and why only a very small percentage of household savings is deployed in the Share Market by the Indian investor. Addressing a half day workshop on “Companies Bill 2009: Class Action Suit and Compensation”, organized by Midas Touch Investors Association, here today, Shri Khurshid pointed out that the timely Government intervention in the Satyam affair has set a totally new precedent where the Government was able to fully protect the interests of the investors by completing the entire process of handing over the reins of the company to an able buyer in a very short span, thereby restoring the prestige of the company at the earliest. Minister for Corporate Affairs said that he sees a well informed investor as furtherance of democracy itself, as it ensures a good Corporate Governance. He said that the Companies Bill 2009 contains a number of provisions for safeguarding the interests of investors and this will be further strengthened while making rules under the new proposed law.
Initiating the discussion, Mr. Virendra Jain, President, Midas Touch Investors Association in his presentation said that compensation laws in a globalized and liberalized economy are very important to preserve the integrity of the market and should be formulated. He said that Class Action Suits are very effective in various European Countries, United States and other countries. There, the investors have received over $60 billion as compensation in last few years. Shri Jain said that unfortunately in India we have no such provision in our laws. He said that there is a need to make a distinction between fraud and normal movement of the market. In the latter case, it is the investor who has to take the risk but in the former, there is need for strong laws to ensure that duped investors are compensated.
A Cross section of experts in Company Management and Finance, company secretaries and lawyers participated in the discussion.