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Satyam: Govt to review Companies Bill 08

January 08, 2009 18:49 IST

The government said on Thursday that in order to prevent Satyam-like frauds it would review and strengthen various provisions of the new Companies Bill, which is currently awaiting Parliament approval.

"After the Satyam [Get Quote] case, there is a case for re-looking at certain provisions of the Companies Bill 2008 to enable the government to take swift and more effective action in cases of large scale fraud," corporate affairs minister Prem Chand Gupta told PTI.

The government is seeking to replace the 52-year-old Companies Act 1956 with new legislation, a bill for which was introduced in the Rajya Sabha in October.

The proposed legislation is primarily aimed at updating corporate laws and reducing state control over the affairs of companies.

Pointing out that the government was duty bound to protect the interest of stakeholders and shareholders, Gupta said, "This (Satyam case) appears to be a case of large scale fraud".

The minister further said that the government will 'leave no stone unturned to punish the guilty...that does not mean suspecting each and every company'.

By and large, Gupta added, the companies are well regulated in India.

The ministry of corporate affairs has already asked Registrar of Companies, Hyderabad, to enquire into the affairs of Satyam following disclosure by B Ramalinga Raju -- who has since resigned from the post of Chairman -- that the company was doctoring the books of accounts.

The MCA could refer the case for investigation to the Serious Frauds Investigation Office, even before receiving a report from the RoC, according to the ministry sources.

The minister had on Wednesday that the case would be referred to the SFIO once a report was received from the RoC, Hyderabad.

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