MCA ordered probe against 93 cos in 2013-14: Minister

The Corporate Affairs Ministry initiated probes against as many as 93 companies in 2013-14 for alleged fraudulent activities -- the highest number recorded in last three financial years.
The Ministry had ordered investigations against 43 firms in 2012-13 and another 13 in 2010-11 for alleged corporate frauds, Minister of State for Corporate Affairs Nirmala Sitharaman said in a written reply to the Lok Sabha.
Besides, till June-end, this fiscal, the Ministry had ordered probes against 3 firms for alleged fraudulent acts.
With this the total number of cases of corporate frauds being probed in the last three financial years stand at 152.

"During the last 3 years and the current year from April 1, 2014 to June 30, 2014, the Ministry, has ordered investigations under...The Companies Act 1956 through the Serious Fraud Investigation Office (SFIO) of the Ministry in respect of 152 companies for alleged corporate frauds," Sitharaman said.
These cases involve allegations of siphoning off/ diversion of funds belonging to firms by promoter/directors, manipulation of books of accounts and other records and frauds through running of schemes by companies for collecting from the public, among others, she added.

The Minister said government had taken various measures to prevent and deal with corporate frauds.

These include enhanced disclosure norms under the new Companies Act so that investors get all relevant information from the firms, statutory status with adequate powers to SFIO as well as provisions under the new law for attachment and disgorgement of assets.
To a query on government action against firms raising funds by misleading public, Sitharaman said the ministry has noticed such acts by 78 companies during last three years and the current year.
"This Ministry has ordered investigation into the affairs of the said companies under...The Companies Act, 1956 by the SFIO," she added.
In reply to a separate question, she also said that 6,871 investor awareness programmes have been organised by the government during the period 2011-12 to 2013-14 to inform investors about fraudulent schemes and the need to make informed investment decisions.

These programmes are organised in association with Institute of Chartered Accountants of India, Institute of Company Secretaries of India and Institute of Cost Accountants of India.
Besides, 100 programmes were also organised through 'Common Service Centre' set up under Department of Electronics and Information Technology.
Moreover, market regulator Sebi also conducts programmes "to educate public on financial schemes offering abnormally high rates of interest," the Minister added.