A new section against fronting was recommended for inclusion in the Companies’ bill

Council: The National Council yesterday directed its economic affairs committee to consider its recommendation of adding a new section in the Companies bill against fronting.

Lhuentse’s member Tempa Dorji said there is no such clause in any of the existing laws and that it has been difficult for the commission to penalize people involved in fronting cases.

“It would help the commission to act against those involved in fronting,” he said, adding that fronting is mostly  prevalent in the private sector.

Samtse’s member Sangay Khandu, who proposed the recommendation said fronting was one of the biggest problems in the business sector and that it was important to include a section against fronting in the bill. “Fronting can be between two Bhutanese or between a Bhutanese and a foreign national,” he said.

Eminent member Dasho Tashi Wangyal said that since the Enterprise Registration bill was withdrawn, it was important to incorporate the section in the companies’ bill. The Council had withdrawn the enterprise registration bill from discussion last week.

“Most think that fronting exists only in small enterprises like shops, bars and restaurants,” he said. But it exists in both big and small enterprises, he said.

Gasa’s member Sangay Khandu said it was also important to see the fronting problem from the policy aspect while enacting the law. He said one of the reasons for prevalence of fronting was the government policy itself.

One such example, the member cited was the ban on issuance of bar licenses by the government. He suggested that such measures should be only temporary.

“The ban on import of vehicles was lifted on the ground that such bans should be temporary,” he said.

He said that while the government banned the issuance of new bar license some years ago, those willing to run bars kept increasing because of the motive to make profits.

At the same time, he said some license holders, who could operate themselves rent out to others for a monthly income.

Deputy chairperson Tshering Dorji, who chaired the session, asked members to come up with proper recommendations. The house also completed the reading of the bill, which comprise of 17 Chapters and 409 Sections.

MB Subba