Amnesty scheme for co law violations

Amnesty scheme for co law violations
ENS ECONOMIC BUREAU

NEW DELHI, MAY 16: The government on Tuesday announced a scheme to give companies and its officers an opportunity to seek immunity from prosecution for offences such as non-filing of documents with the Registrar of Companies.

Announcing this in Lok Sabha, Union Law, Justice and Company Affairs minister Ram Jethmalani said: "After the expiry of the scheme on August 31, 2000, the department will come down with a heavy hand on the erring companies and the fines will be increased to 10 times the present amount."

The scheme, if successful, would net the Department of Company Affairs Rs 100 crore as income. The amount is proposed to be spent on computerising and modernising the work of the department and streamlining its operation.

There are over 5.16 companies in existence in the country and only 2.61 lakh annual reports and 2.71 lakh balance sheets were filed in year 1999. The compliance level for the two documents was around 50 per cent.

"More than 5 lakh prosecutions will have to be launched by the government" the minister stated remarking on the compliance level. "Experience shows that prosecution do not really solve the problem of widespread non-compliance."

There are 38,603 cases pending in various courts as on March 31, 1999. "Experience has shown that disposal of prosecution cases takes considerable time. Courts generally levy a nominal penalty while disposing off cases. The results are not commensurate with the time and effort that go into obtaining order do the court."

The scheme has been drafted after discussing the matter extensively with officers of the Department as well as field officers and the three institutes under the supervision of DCA--the Institute of Chartered Accountants of India, the Institute of Company Secretaries of India and the Institute of Cost and Works Accountants. Pamplets in simple language explaining the scheme will be printed and distributed through the field offices and through three institutes.