Tag Archives: Fraud

Connection of Director’s Disqualification to Fraud


Disqualification of directors certainly is a hot topic among professionals practising corporate laws. Irrespectively of popular perception, the list compiled and released by Ministry of Corporate Affairs does not confer any disqualification to any director. These directors were already disqualified. In a serious violation, many of these directors might have failed to communicate about their disqualification to companies appointing or reappointing them after the actual date of disqualification. Such failure has penal consequences. This blog post will discuss serious consequences of the failure of compliance with law and procedures after incurring disqualification by a director.

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REPORTING OF FRAUD


Ministry of corporate Affairs issued a notification dated 14th December 2015 and published here in the Gazette of India dated 15th December 2015 regarding amendment in the Companies (Audit and Auditors) Rules, 2014.

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Part of Companies Amendment Act became Effective


A draft notification posted here on website of Ministry of Corporate Affairs says that Section 1 to 12 and Section 15 to 23 of the Companies (Amendment) Act, 2015 came into force with effect from 29th May 2015. The official language of notification read, “the Central Government hereby appoints the 296 May, 2015 as the date on which the provisions of sections 1 to 12 and 15 to 23 of the said Act shall come into force.” The Amendment Act was got presidential assent and notified by Ministry of Law and Justice as such on 26th May 2015 in official gazette.

Two sections not notified yet deals with Fraud Reporting Procedure [Section 13 amending Section 143 of Principal Act] and Related Party Transactions [Section 14 amending Section 177 of Principal Act]. This is understood that Rules related to these sections are in drafting process.

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THE COMPANIES AMENDMENT BILL 2014: PART 2 OF 3


The Companies Amendment Bill 2014 has been introduced and passed in Lok Sabha recently. This blog post has intention to analyse proposed changes in the Companies Act 2013.

Most important massage, this amendment prepares a best case for drafting skill development programmes in India. I am reading here this Bill clause by clause. This will be a three part series and part 2 of 3 is present here.

To amend sub-section (1) of section 123 of the said Act to include provisions for writing off past losses/depreciation before declaring dividend for the year [Clause 10 of the Amendment Bill]

A forth proviso is being added to the effect that no company shall declare dividend unless carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company for the current year.

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FRAUD AND OTHER PUNISHMENTS


One might say the Companies Act, 2013 is more about dealing with corporate fraud than regulating companies. Section 447 is most talk about provision of this Act and many sections refer to this section directly.

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INSPECTOR’S REPORT AND THEREAFTER


Consequence of any investigation is report. The Report is just a milestone. We will discuss the journey ahead in this post.

Inspector’s Report (Section 223):

In inspector shall submit all interim reports, if any, and final report to the Central Government.

Every report shall be in writing or printed as per direction of the Central Government.

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PROCEDURE RELATED TO INQUIRY AND INVESTIGATIONS


We are going to deal corporate frauds, genre of crime committed by most educated, polished, professional, greedy white colour criminals. You may find these people to come out on technical or procedural grounds even after committed in all black and whites.

HUMAN INSPECTOR (SECTION 215):

No firm, body corporate or other association shall be appointed as an inspector.

This leaves only human being to be appointed as inspector.

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