It now transpires that the DCA and the finance ministry had divergence of views on inter-corporate investment while the difference also came to the fore between DCA and the department of electronics on the sweat equity.The finance ministry, had strongly recommended abolition of prior permission of the government for inter-corporate investment by Indian companies. The finance ministry plea was that only then could the Indian companies be equated with their foreign counterpart in the field of investment.

The DCA however, put its foot down and blandly rejected the suggestion.Similarly, the DoE had differed with the DCA on the sweat equity issue. The DoE, while accepting other provisions, insisted that the computer software companies in India or their subsidiariesabroad should be allowed to issue sweat equity to their promoter director or whole-time directors or employees for providing any know-how, intellectual property or value addition to the company on exclusive basis on such terms and conditions as may be prescribed by a resolution passed by the company in general body meeting.

While accepting the DoE suggestion, however the DCA made it clear that the facility of issuing sweat equity would now be made available to all companies instead of restricting it to only computer software companies as suggested by the DoE.

Yet another suggestion of the finance ministry shot down by the DCA relates to powers of officials. The finance ministry had mooted that the proposal to vest central government officers with powers to summon and examine witnesses under oath are extraordinary powers and that these were not necessary where there is a quasi judicial body like the company law board. The DCA rejected it, saying that such powers would be given only to officials of thelevel of regional director and other notified officials.

The ministry of finance had also opined that the buy-back of shares should be done under transparent conditions with adequate investor protection. Case to case approval should be avoided in the spirit of liberalisation, the MoF had contended.

The DCA responded by saying that prior approval from Sebi was required for buy-back of share only in case of listed companies. The non-listed companies buy back their shares without any approval, it added.

As regards the legislative department whose views were also also sought, it contended that the proposal for setting up of investor education and protection fund envisages that the fund would be managed by an independent authority to be constituted by the central government. The legislative department demanded spelling out details of the proposed authority.In reply, the DCA elaborated to say that the authority would include representatives from investors associations, Sebi, RBI, institute of charteredaccountants of India, institute of company secretaries and DCA.

The DCA, finally, succeeded in pushing for introduction of a short bill for amending the Companies Act, 1956. It said the amendments proposed are "to allow companies to buy-back their own shares, to provide nomination facility to the shareholders of share, debentures, deposits, to set up investor education and protection fund, to make provision for issue of sweat equity, to include infrastructure development finance company limited as public financial institution, to vest power of court in officers concerned with the execution of the act and to make mandatory compliance of accounting standards in preparation of annual accounts of companies."