Data privacy is becoming increasingly crucial in preserving and protecting personal information of individuals in particular. In India, data protection law is still in developing stage and there are a lot of gray areas.
In an attempt to shield privacy of personal data of shareholders, a new ruling has been issued by the Corporate Affairs Ministry (MCA) empowering companies (public and private) with right to resist request for personal information of shareholders by any persons who inspect their register of members.
The underlying intent is to prevent misuse of personal information of shareholder by third parties and to preserve sanctity of personal information of shareholders. Under existing laws, information (including personal information) relating to shareholders of a company can be accessed by any person, which makes it easy for any person to get a hand on personal information of shareholders. Accordingly, PAN of shareholders may be misused by third parties to get loans effecting credit scores of such shareholders.
Large corporations are constantly bringing to the notice of central government about requirement of protecting personal information to prevent misuse of such information. It appears that now the central government has recognized the need to provide a layer of protection to personal data of shareholders. Such personal information may include e-mail ID, unique identification number, PAN, and address or registered address (in case of a body corporate) of shareholders.
With the latest development, companies will have feasibility of storing personal data using a software with restricted access to any person who needs to review any data maintained by the companies by providing an additional layer of protection to personal information.
This ruling should ensure personal data of investors and shareholders is properly preserved and only competent and authorized personnel get to access such personal information.
As the other side of the coin, it could also affect right of stakeholders (who own economic interest in the Company) to learn full details of persons who manage their economic interest.
However, all in all, this seems to be a step in right direction and will serve as a starting point to strengthen data privacy laws in the country and preserve the privacy of persons.
Source : Hindu BusinessLine
