The requirement to seek government permission for acquisitions by companies having over 25 per cent market share might be dispensed with.

The deletion of relevant sections in the Companies Act of 1956 in this regard, which has been enshrined in the proposed Companies (Amendment) Bill, comes in the wake of the abolition of Monopolies and Restrictive Trade Practices Commission, which would be replaced by the Competition Commission.

This was indicated by Vinod Kumar Dhall, company affairs secretary, in New Delhi on Wednesday.

The government was 'open to the fine-tuning and changes' in the proposed bill, which was for strengthening laws, he said, addressing a seminar 'The Companies (Amendment) Bill, 2003', organised by the Federation of Indian Chambers of Commerce and Industry.

The government has already introduced the Companies Amendment Bill in Parliament and further amendments are likely to incorporate the recommendations of the Chandra committee before its passage.

"The Naresh Chandra committee report is expected within a month. It is looking into the issues like limited liability partnership, easing compliance burden for smaller companies and doing away with certain regulations," Dhall said.

The committee, which had earlier submitted a report on corporate audit and governance, is also looking into the various ways on streamlining and improving the regulations for easing the compliance burden, especially for the smaller companies.

Defending the proposed amendments in the Companies Act, Dhall, who would shortly move to the Competition Commission, brushed aside criticisms that the proposed bill was aping the developed countries' laws.

"We did not follow the Sarbanes-Oxley Act (of the US) blindly, and the Naresh Chandra committee was set up to look into the Enron and Andersen type mistakes," he said.

"We are open to any valid and constructive suggestion so that we can fine-tune or make changes in the proposed bill," he said.

Dhall said the proposed amendment had recommended that the auditor should be an independent entity and must not undertake any non-audit work for the same client.

He said this provision, which would bring in the most needed credibility on the accounts of a company, would add strength to the corporates, especially when they decide to go for overseas borrowing or listing.

On the independent directors, Dhall said it was based on the Naresh Chandra committee report, which suggested that after excluding the nominees of financial institutions, of the remaining, at least half of them should be independent.

He said the proposed amendments in the Companies Act was not brought in all of a sudden since it was drawn up after going through the reports of the joint parliamentary committee, which looked into the stock scam of 2001, and the Chandra committee.

He lamented that the penalties in the Companies Act was too low and it was not acting as a deterrent and it was not possible to identify the "black sheeps" or vanishing firms.

"The penalties provided in the Companies Act are jokes and that is why violations are common," Dhall added.