Company secretaries must advice their clients that short cuts are wrong and ensure compliance with law, NCLT President Justice M M Kumar said today as he flagged concerns about instances of fabrication of documents.
Describing company secretaries as “insiders” when it comes to the affairs of corporates, he emphasised that best practices should be followed.
National Company Law Tribunal (NCLT), constituted last month, has replaced Company Law Board (CLB).
“Company secretaries are the insiders… They must insist and advice their clients that short cuts are the wrong ones,” he said, adding that such things can land them in trouble.
“Let best practices be practised, professional practices be practised… come what may you must stick to the issue and requirement of the law,” he noted.
Kumar was speaking at an event organised by company secretaries’ apex body ICSI and NCLT Bar Association here.
As an example, he said that if the minutes of a meeting are required to be recorded, company secretaries can give more time of a day or two but “you can’t say that you record whenever you want”.
Kumar, who was Chairman of erstwhile CLB, said during that tenure he had come across problem of fabrication of documents.
There have been various instances of corporate misdoings including fudging of accounts and fabrication of documents.
National Company Law Appellate Tribunal (NCLAT) Chairperson Justice S J Mukhopadhaya was also present.
Under the Companies Act, 2013, NCLT and its appellate tribunal were notified by the Corporate Affairs Ministry on June 1.
It has been set up at ten locations, including the national capital, Mumbai, Kolkata, Hyderabad and Chennai.
Among others, NCLT has powers to delegate inquiry related to proceedings before it, securing assistance of a magistrate or collector to take possession of property.