The recommendations of Vepa Kamesam committee calling for a separate Act to govern the serious fraud investigation office (SIFO) in the matters related to corporate fraud would be taken up close on the heels of the proposed new Companies Bill, minister of corporate affairs (MCA) Salman Khurshid told FE at the sidelines of the CII meeting.
The eight-member committee, headed by Vepa Kamesam, a former RBI deputy governor, was appointed to review the role of investigating agencies in dealing corporate frauds.
Following the Satyam fiasco, Kamesam report assumes significance with its series of recommendations including its emphasis on whistle blower’s clause, empowering SIFO to attach properties of errant companies, setting up of special courts to try civil and criminal cases in matters regarding company law violations, upgradation of SIFO to attract deputation talent available from other premier investigating agencies etc.
“We have been conducting deliberations on the various tenets of proposed new companies Bill and recommendations of the Kamesam committee will be duly looked into and incorporated,” Khurshid said. To a question on status of 37 companies charged by SIFO with serious corporate frauds over a period of 3 years, he said the matter under adjudication of a statutory authority should not be commented on till its outcome. Earlier in his address at the CII meet, he touched upon corporate governance issues in the proposed companies Bill that is before the standing committee of Parliament.
“We are reviewing issues like nexus among independent directors in decision making, sourcing of gene pool of independent directors, institutionalising family’s role in governance, corporate governance reflecting Indian cultural ethos, accounting practices, transparent form of internal assessment in nomination, remuneration and audit, consensus in rotation of statutory audit, possibility of dual audit etc,” he said. The minister for MCA said the evolving of corporate governance standards under the proposed new companies Bill would also be extended to firms set up under the limited liability partnership (LLPs) mode.
Regarding the IFRS roadmap, he said the convergence is possible by 2011, however, it would be a calibrated adoption between large companies and small companies with compliance cost playing the deciding factor. “Aping the west will not work and we need a malleable and flexible Indian model,” he added. Elaborating on the investor protection objectives of his ministry, the minister said the approach is to bring together corporate governance and corporate social responsibility.