Mallya row: SEBI seeks changes to Companies Act

  1. Capital markets regulator,Securities Exchange Board of India(SEBI) has requested the government to amend the Companies Act to ensure that a director declared by Sebi as a disqualified person should immediately vacate the position.This appeal was required due to defaulter businessman Vijay Mallya’s reluctance to vacate his position as a director.
  2. Under the Companies Act, the office of a director becomes vacant in case of he or she being disqualified by an order of a court or a tribunal, among other reasons,but there is no explicit mention of an order by the Securities and Exchange Board of India (Sebi).
  3. In order to rectify this,Sebi has proposed that the Companies Act should also clearly mention that a person should vacate the office of a director if Sebi orders his or her disqualification.
  4. The Companies Act 2013 is an Act of the Parliament of India on Indian company law which regulates incorporation of a company,responsibilities of a company, directors, dissolution of a company