‘There should be zero tolerance for corporate fraud’
The two panels appointed by the finance ministry to probe the National Spot Exchange Ltd.’s (NSEL) payment crisis have submitted their reports on Monday and the government would be initiating steps to take action, according to Minister for Corporate Affairs Sachin Pilot.
“We have got a report from the Registrar of Companies (RoC) which went into the non-compliance of rules and provisions of the Companies Act in this case. We have to ensure investor’s and depositor’s money is safe,” Mr. Pilot told reporters after speaking at a conference on Companies Act, 2013, organised by the Confederation of Indian Industry (CII). Mr. Pilot said the Income-tax Department and the Enforcement Directorate had also investigated the case. The recently passed Companies Act had all the ingredients for a better regulated environment. “There should be zero tolerance for corporate fraud”.
He said that the new Act clearly defined fraud, and “the idea is to make sure we can detect things before they occur as we have technology to ‘red flag’ such cases. We are in the process of plugging the gaps in regulations between authorities such as Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI) and the Ministry of Corporate Affairs as we all have to work together to prevent wrongdoing”.
The Companies Act, 2013, replaced the earlier Act dated 1956. “The Act should reflect global realities and India’s situation today and reflect the requirement of the times”.
The minister said that the proposed National Financial Regulating Authority (NFRA), to be set up under the new Act, would be “an overarching body with quasi-judicial powers to ensure quality of audits, reporting and standard setting are commensurate with global standards”.