News Highlights:Ministry of Corporate Affairs regional directors get more powers under companies law
NEW DELHI 8 May, 2016
To reduce procedural requirements, the Ministry of Corporate Affairs (MCA) has given more powers to its regional directors with respect to scrutinising firms suspected of violating companies law.
The move comes at a time when the ministry is bolstering efforts to curb corporate misdoings by implementing stringent provisions under the Companies Act, 2013.
It has now allowed regional directors to appoint inspectors for inspecting books of companies under the Act to ascertain whether any violations have happened.
"...the central government being satisfied that circumstances warrant, hereby delegates the powers to appoint inspectors for inspection of books and papers of a company under sub-section (5) of section 206 as ordered by the central government, to the regional directors," the ministry said in a recent notification.
Under Section 206 of the Act, the government has powers to call for information, inspect books and conduct inquiries about companies.
When an inspector calls for the books of account and other books and papers under this section, it is the duty of the director, officer or other employee of the company concerned to provide all required documents, as per the Act.
Under the ministry, there are seven Regional Directors (RD) who supervise the working of registrars of companies and the Official Liquidators in their respective regions.
An inspection unit is attached to the office of every Regional Director for carrying out inspection of the books of firms.
There are RDs for Eastern, Southern, Northern, Western, North Western, South East and North Eastern regions.
Last month, Corporate Affairs Minister Arun Jaitley told the Lok Sabha that the companies law has stringent penal provisions to deal with frauds as well as sufficient ones to ensure firms are traceable and financial transactions are properly reported.