The Union Cabinet on March 1, 2018, approved a stringent Fugitive Economic Offenders Bill that provides for confiscation of assets even without conviction in cases where economic offenders flee the country, and paying the lenders by selling off the fugitive’s properties. Such persons will be tried under the Prevention of Money Laundering Act.
The draft bill is aimed at deterring someone like jeweller Nirav Modi, who fled the country and has not returned to face trial in the Punjab National Bank fraud case.
According to sources, there will be a list of scheduled offences along with the Bill. If a person committed an offence on the list, and a competent court issued an arrest warrant, and the person left the country to avoid this, then the court could deem him or her a fugitive economic offender, the sources said.
Union Finance Minister Arun Jaitley said on Thursday, “We can't allow people to make a mockery of the law, that they first indulge in loot, and then leave the country to avoid the law.”
Official sources said the Cabinet, headed by Prime Minister Narendra Modi, has approved the Bill, which is likely to be brought before Parliament in the second half of the budget session beginning March 5.
The provisions of the Bill will apply to persons against whom an arrest warrant has been issued for a scheduled offence as well as wilful bank loan defaulters with outstanding loans of over ₹100 crore.
National Financial Reporting Authority
The Cabinet also approved the creation of a National Financial Reporting Authority (NFRA). Section 132 of the Companies Act provides for its constitution.
The authority will apply to only certain companies that will be notified in the rules. These will include all listed companies, and large unlisted companies. The size of these unlisted companies will be decided in the rules.
The Institute of Chartered Accountants of India will continue its audit procedures for smaller companies. According to Mr. Jaitley, the NFRA will investigate matters of misconduct by chartered accountants.
(With inputs from PTI)
