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Over 100 cases of suspected frauds to overflow to 2013

There are hundreds of other cases where companies have failed to adhere to one or the other regulation

Press Trust of India  |  New Delhi 

Mandarins of Corporate Affairs Ministry, headed by a young minister, have a busy year ahead, as they would be confronted with over 100 pending cases of probe into suspected frauds overflowing from 2012, and look into overhauling the way operate and are regulated.

While about three dozen pending cases pertain to 'serious frauds', a vast majority of them are related to a menace called 'multi-level marketing' schemes, where lakhs of investors are suspected to have lost their hard-earned money.

In addition to these cases of suspected frauds and cheating of investors by various companies, there are hundreds of other cases where have failed to adhere to one or the other regulation, senior officials say.

They, however, term them as 'routine' matters in comparison to other 'serious' cases.

The officials are hopeful of a much better year ahead in 2013, enthused by the fact that 2012 was an eventful year with strenuous efforts towards legislative reforms and transparency in governance despite instances of some corporate scandals.

Expectations are also high on the long-awaited new Bill eventually coming into force as it was passed by the Lok Sabha towards the end of its Winter Session. It will now go to the Rajya Sabha in the next session.

Adding to the optimism, a high-profile committee is likely to soon submit its report on ways to improve business climate and boost investor confidence, while the ministry on its part expects stability at the top with change of stewardship to a young minister, Sachin Pilot, after several changes in the past.

When it came to 2012, it was marked with hectic parleys over strengthening of corporate disclosure norms within the ministry corridors.

Besides, the Serious Fraud Investigation Office (SFIO) and the Competition Commission of India (CCI) -- both linked to the Ministry -- too remained busy.

SFIO is currently conducting its probe in about 35 cases, while close to 90 other cases of alleged duping of investors through MLM and collective investment schemes are also being looked into by the ministry, a senior official said.

However, one major handicap could be shortage of manpower.

Corporate Social Responsibility (CSR) is also emerging as a focus area for the Ministry under the reins of Pilot, who assumed charge from Veerappa Moily in October.

The revamped Companies Bill, once in place, would require companies to shell out two per cent of their three-year average net profit towards CSR and non-compliance along with failure to explain the reason would attract penalties.

Simultaneously, MCA is working on framing a comprehensive policy on corporate governance.

First Published: Fri, December 21 2012. 12:46 IST