Companies Bill to be before Lok Sabha on Monday

The Bill will ensure more powers to the Serious Fraud Investigation Office to takcle corporate frauds

On Monday, the much-awaited amended Companies Bill, 2011, will be placed before the Parliament, which will ensure more powers like that of a statutory body for the Serious Fraud Investigation Office (SFIO) to tackle corporate frauds, Union minister for corporate affairs Sachin Pilot said today.

“The Bill, which was in the making for almost a decade, will be placed before the Parliament on Monday. In order to avoid corporate frauds before it happens, SFIO will be given more statutory powers. Moreover, there will be better tie ups between investigative agencies at the state and Centre, I-T department and information technology ministry with SFIO,” Pilot said addressing an MCC Chamber of commerce meet here. He added that the processs of taking action will not fall in “between various regulatory bodies”.

 

Through the move, the government is looking to avoid corporate frauds like Satyam. The minister said that an understanding has already been reached between the wing of information and technology ministry that handles online frauds and SFIO on sharing of database. Under the new regulations, SFIO is expected to get powers to file cases, take action against culprits and co-ordinate with other investigative agencies like CBI or Enforcement Directorate in case of any corporate fraud.

Seeking more co-operation from the state investigative agencies in this regard, Pilot said, “There has been cases of financial frauds in states like West Bengal where some companies, chit funds and ponzi schemes have taken away hard earned money of small investors. Our primary objective is to protect small investors.”

Recently, the Reserve Bank of India had raised concerns regarding the flouting of rules by chit funds in West Bengal. Meanwhile, corporate affairs ministry is planning to launch an awareness campaign among investors of these financial schemes. “Centre looking into the issue, we would also encourage state governments’ in taking necessary action against these firms. These firms are currently misusing the loopholes in law,” he added. Pilot also highlighted that states like Assam, Sikkim, Maharashtra and Madhya Pradesh are also facing similar issues.

The Companies Bill will be replacing the Companies Act of 1956, which was amended several times. The Bill aims to make corporate social responsibility compulsory, make corporate governance more transparent and make independent directors more accountable.