The
Department of Company Affairs (DCA) has set up a Task Force under
the Chairmanship of Joint Secretary, Shri Rajiv Mehrishi to take
action on the recommendations/observations of the Report of the
Joint Parliamentary Committee on the stock market scam. The Task
force will identify the actionable points in the JPC Report and
take the required actions in the time frame of six months as prescribed
by the JPC. The other Members of the Task Force are Sh. M.N. Mathur,
Economic Advisor, Sh. R. Vasudevan, Director Inspection &
Investigation and Sh. Pawan Kumar, Deputy Secretary. Sh. V.S.
Rao, Director, Inspection & Investigation will be the Convener
of the Task Force.
Certain recommendations/observations
will also require coordination and interaction with other departments
and organizations. The Department of Company Affairs will undertake
a process of dialogue to facilitate compliance of such recommendations.
In its Report, the
JPC had noted that strict and extensive actions had been taken
by the DCA during its scam related inspections and against vanishing
companies. It has also noted that DCA does not have adequate regulatory
powers and these need to be strengthened.
The role of the Department
of Company Affairs in the stock market is relatively marginal.
As far as the companies involved in the scam are concerned, the
Department has ordered/launched 539 prosecutions which is more
than twice the prosecutions launched after the 1992 scam. 58 of
these prosecutions relate to misuse or diversion of fund under
section such as 63/77/295/370/372 and 372A of the Companies Act,
1956. Action is also being taken, under section 408, for appointment
of Government Directors, in respect of eight companies.
