Pilot promises action on NSEL for breach of Companies Act

Two panels appointed by finance ministry to probe NSEL crisis have submitted their reports to finance secretary Arvind Mayaram

The corporate affairs ministry is examining a probe report on the National Spot Exchange (NSEL) payment crisis, minister Sachin Pilot said here on Monday.

“Our aim is to protect the investors and depositors, so that they do not get hit by such crisis. My ministry today has received a report from the registrar of companies, which had looked into the non-compliance with  regulations and provisions of the Companies Act in the NSEL episode. The ministry will take action as early as possible,” he told reporters.

The said action will cover both NSEL and the companies found in breach of the Companies Act and other provisions, said Pilot, who was speaking after addressing a conference organised by the Confederation of Indian Industry on the new Companies Act.

He said the two panels appointed by the finance ministry to probe the NSEL crisis had also given their reports. Apart from these, the income tax department and enforcement directorate have also probed.

The minister said the government’s emphasis was going to be on cutting the response time to such episodes and to close the regulatory gaps. The coordination among various agencies would be improved.

Pilot said the new Companies Act redefined fraud, helping a clearer judgement and to start action early on alleged wrongdoing. The definition has come in the backdrop of instances as with the erstwhile Satyam Computers and the chit fund crisis. “The idea is to mitigate the fraud and raise a red flag before such an event erupts,” he said.

On the report by the Damodaran committee on scrapping retrospective taxation, Pilot said the contents had been displayed on his ministry’s website and suggestions sought from stakeholders.

“The ministry will subsequently make its recommendations to the cabinet,” he said.