Date:08/04/2005 URL: http://www.thehindubusinessline.com/2005/04/08/stories/2005040802340700.htm

Back Minister urges speedy probe into white-collar crimes

Richa Mishra

New Delhi , April 7

UNHAPPY with the delay in initiating action against the companies that have indulged in white-collar crimes, the Minister of State (Independent Charge) for Company Affairs, Mr Prem Chand Gupta, has directed his Ministry to work out a time-bound action plan to ensure that the investigations are taken to a logical conclusion.

The Minister emphasised that the reports submitted by the Serious Fraud Investigation Office (SFIO) should be examined as a priority and appropriate action should be taken on the recommendations of the report within a given timeframe.

"Undue delays in taking action against the companies weaken the very purpose of such investigations," he added.

Mr Gupta recently took a review meeting on the status of cases referred to SFIO.

He said that the Investigation Office has submitted its report within the stipulated timeframe. According to him, the loss of time in examining the reports and taking action based on the recommendations of the SFIO was a cause of concern.

"The entire process needs to be expedited," official sources said.

Till date, a total of 11 cases have been referred to SFIO since its inception in October 2003.

They include Daewoo Motors India Ltd, DSQ Software Ltd, Design Auto Systems Ltd, Bonanza Biotech Ltd, Ispat Industries Ltd, Vatsa Corporation Ltd, and Ketan Parekh group of companies.

The cases that have been referred to the SFIO in February this year are Mardia Chemicals Ltd, Adam Comsof Ltd, Soundcraft Industries Ltd, and Kolar Biotech Ltd.

While investigations are under progress in the cases referred in February, the SFIO has already submitted the reports on Daewoo Motors, Design Auto Systems, Bonanza Biotech, and Vatsa Corporation.

The investigation orders against DSQ Software and Ketan Parekh group of companies have been stayed by respective High Courts.

In the case of Ispat Industries, the Calcutta High Court quashed the order of investigation on the grounds that the Registrar of Companies (RoC) had not followed all the procedural requirements under the Companies Act.

However, the Ministry is free to get the case re-examined by the RoC, if deemed necessary.

"A fresh report has been submitted by RoC, which is under examination," the sources said.

The action taken report of the Ministry shows that in the case of Daewoo Motors, 21 prosecutions under Companies Act have been filed in February.

"The Ministry also proposes to file cases under Indian Penal Code (IPC) for which it is in consultation with the Department of Legal Affairs," the sources said.