The Union Cabinet on Wednesday approved the amendment of Prevention of Corruption Act, 1988, by pursuing the Prevention of Corruption (Amendment) Bill, 2013, currently pending before the Rajya Sabha. The amendments approved by the government are in line with recommendations of the Law Commission to the proposed amendments to the Prevention of Corruption (Amendment) Bill, 2013.
Legal experts said the move to make organisations responsible in case their employees or agents bribe public servants is likely to change the way companies treat such issues internally. "Companies could now be prosecuted for acts of bribery by an employee," says Sumit Makhija, senior director, Deloitte in India.
Legal experts point out companies usually tend to cover up cases of bribery or pass them off as an individual's act of corruption.
However, if the amendments are passed by Parliament, the only available defence for companies would be to ensure there were "adequate procedures" in place to prevent such a conduct. "This will cast a greater onus on the corporate to put in place a robust anti-corruption system and undertake appropriate due diligence to ensure that employees, agents, and any other person engaged in provision of services for or on behalf of the corporate do not offer bribe," says Naresh Shah, partner, Economic Law Practice.