by Harish Gupta, National Editor, Lokmat Group
Govt. worried over Tax Terrorism now
Amending act, to Check probe agencies
Harish Gupta
New Delhi, Oct 28
Realizing that anti-corruption agencies are causing immense damage to the business climate in the country in their zeal, the government has finally woken up to check them.
If the Corporate Affairs Ministry is contemplating to amend certain key clauses governing companies Act itself, all large bank fraud cases above Rs 50 crores are being examined afresh by a reconstituted Board with more powers. The board will examine, before an FIR is filed with the police, CBI or any other agency by the concerned bank, whether the case is fit enough for criminal intent and investigation.
There is virtual climate of fear among the bank manager to managing directors onward not to sanction loans and play safe. The bureaucracy is also wanting clear cut orders either from the top or from the committee of secretaries before taking decisions. Invariably, the matters are delayed, dragged and buried as no one wants to invite the wrath of the probe agencies later.
Several international companies of repute including the manufacturers of Rafale have cautioned the Indian government about the large scale registration of criminal cases of every financial act by various agencies.
There are as many as dozen agencies which are going after financial frauds in one way or the other. Its not merely the CBI or Enforcement Directorate (ED), but the CBDT & CBEC have also acquired criminal powers to prosecute now and issue look out notice against businessmen for tax evasion. Then there is Fraudulent Bankruptcy under the Banking Regulation Act, Illegal Foreign Trade and Directorate of Revenue Intelligence, Black Money Act, Company Frauds under the MRTPC Act, Information Technology Act for Online Frauds, and host of others.
Now the government want to ally the apprehensions of the Indian and foreign companies who want to set up shop in a big way particularly after tax concessions, that it wants to keep these agencies in check. This can't be done through oral orders. Therefore, systems are being put in place beginning with amending the corporate affairs act so that SFIO & other agencies do not run amok.
The advisory board will conduct the first level of examination in all major fraud cases before recommendations or references are made to investigative agencies such as the CBI, ED and others.
All cases involving officers of General Manager and above in respect of an allegation above ₹50 crore will have to now be referred to the board.
CVC Sharad Kumar told Lokmat that the advisory board will go a long way in achieving its objective to find a distinction between frauds and genuine business decisions.
Ends
