Govt to set up authority to help duped investors

In the wake of various financial frauds, including the Rs 14,000 crore Satyam scam, the Government is planning to set up an authority to compensate duped investors by recouping money from fraudsters.

The disgorgement authority, which will be under the administrative control of the Corporate Affairs Ministry, was mooted in the aftermath of various stock market scams in which small investors lost crores of rupees.

Disgorgement, as a financial term, means the forced giving up of profits obtained illegally or unethically.

The Companies Bill 2009 has provisions for strengthening the disgorgement clause, which is at present "not precise" and "left to individual interpretation", according to a senior official of the MCA.