Companies defrauding investors would be dealt with severely: Sachin Pilot

New Delhi, Sept 12 : Union Minister of State for Corporate Affairs Sachin Pilot on Thursday said strict action would be taken against companies indulging in any fraudulent activities.

Pilot said the government was working towards devising a plan to curb irregularities.

He also said that stringent action would be taken against any company, which deliberately did not adhere to provisions of the Companies Act.

"The Finance Ministry has made two committees, the reports will be submitted by today or tomorrow. But, the Ministry of Corporate Affairs is also examining non-compliance of the company's law, and I think, within a day or two, we will take a final decision as to what is to be done. But, I want to make sure everybody realises that if any company has done willful non-compliance of the Company's Act, then we will certainly take action," he said.

The Serious Fraud Investigation Office (SFIO), which functions under the Corporate Affairs Ministry, has already been involved in the setting up of a fraud detection model which aims to work as pre-emptive warning system to detect corporate fraudulence in its initial stages.

Pilot denounced the companies, which tried to misuse loopholes in the act to their own advantage.

He said he hoped to have clarity over the next few weeks on multi level marketing companies and companies, who were violating the law.

"I have requested Mr. Thomas to issue the guidelines, so that there is clarity as to what is acceptable and what is not acceptable, and now, that the Food Bill, is passed, the ministry has more time. Hopefully, over the next few weeks, we will have much more clarity on the multi level marketing companies and companies that are violating the law, because we must differentiate the law abiding good companies from the ones that are misusing the loopholes and are duping people of investments," he added.

He said that any company trying to defraud investors or indulging in ponzi schemes would be dealt with severely.

--ANI (Posted on 13-09-2013)

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