The Union Corporate Affairs Ministry on Monday decided to issue a notification which will be amending the Companies Incorporation Amendment, 2014 withdrawing the provision which would certainly make the conversion of public sector companies into private companies a difficult process.
This decision is being taken to protect the rights of the shareholder’s. The provision withdrawn allowed the Public companies to covert into Private companies granted their was no rejection from the authorized government official.
But the new rules are also changing the way applications are being handled when a shareholder objects to such conversion. Now only Regional Director attached to the Ministry can approve such conversion given the change does not affect the interest of the company nor it is meant to avoid the provisions of the company law.