'New Companies Act will prevent more Satyams'

Thursday, 26 February 2009, 03:16 Hrs   |    1 Comments
Printer Print Email Email
New Delhi: Corporate Affairs Minister P.C. Gupta Wednesday said once the revised Companies Act becomes law, it would provide more teeth to investigating agencies that probe corporate fraud.

Replying to a debate in the Lok Sabha on the Satyam scam, the minister said the new Act provided for strengthening investigating agencies like the Special Fraud Investigation Organisation (SFIO), setting up of special courts to ensure speedier trials, and adoption of new accounting standards to prevent collusion between auditors and clients.

"The revision of Companies Act 1956 bill has been placed in the house and is pending with the standing committee," said Gupta.

The opposition was up in arms, saying the lack of regulation was the reason the $1.43-billion Satyam accounting scam occurred, and the manner in which Satyam's present chief executive A.S. Murty sold equity in the company days before the fraud was admitted by company founder B. Ramalinga Raju.

Gupta sought to assuage frayed tempers, saying: "Action taken by government has been appreciated by everybody, everywhere including publications like Financial Times in London."

Opposition members also wanted a thorough probe into the possible involvement of the top political brass of Andhra Pradesh, especially as two companies promoted by Raju, Maytas Infra and Maytas Properties, were allotted thousands of acres of land.

The probe by SFIO into the Satyam scam has been extended to the Maytas companies run by Raju's two sons.

Gupta also said the role of Satyam's former auditors, PriceWaterHouseCoopers, was also being investigated and a show cause notice had been issued to it.

He, however, asked members of the Lok Sabha to not be overtly critical. "I admit that it is an unfortunate incident. But if we ridicule our system to this extent, it will collapse."
Source: IANS
SpiceJet plans aggressive
Budget passenger carrier SpiceJet plans to aggressively expand its international networks to fl..
GST rate cut to spur Bengaluru
The realty market in India's tech hub is set to grow as lower Goods and Services Tax (GST) rate..
Fossil Group sells smartwatch
Global watch and accessories maker Fossil Group has announced to sell its smartphone technolog..
Ola raises Rs 400 cr for electric
Leading ride-hailing cab aggregator Ola on Friday said it raised Rs 400 crore from its early in..