MCA mulls 18-24 month timeline for RoC probes

Written by Ronojoy Banerjee | Ronojoy Banerjee | New Delhi | Updated: Sep 9 2010, 04:24am hrs
The corporate affairs ministry is mulling fixing strict timelines for investigation conducted by the registrar of companies (RoC) to bring in more accountability in the working of its various offices across the country.

The Centre can fix the maximum time for completing RoC probe anywhere from 18-24 months.No final decision has been taken yet.

As per the current practice, the ministry decides the approximate timeline required for finishing an investigation by the RoC on a case-by-case basis. However, the offices are not bound in any way. In specific cases, we put pressure on RoCs to complete the investigation fast, a ministry source said.

In fact, the Parliamentary standing committee headed by former finance minister Yashwant Sinha has also recommended a strict timeline for RoC investigations. It has noted that the investigations by RoC should be time bound. The committee has also said it should be obligatory for the RoC to inspect records of the books of a company at least once in a year.

However, sources said it could be impractical for the RoC to conduct an inspection every year solely because it lacks the requisite manpower. The ministry source said that faster completion of RoC investigation was also important to instil confidence in the investors. The Parliamentary standing committee has also recommended giving statutory powers to the Serious Fraud Investigation Office (SFIO) to make the investigations it conducts more binding upon the companies.

Companies Bill

The Companies Bill 2009 may get enacted into a law by the end of the current financial year, said R Bandyopadhyay, secretary, corporate affairs ministry on Tuesday. He said following the reccomendations of the Parliamentary committee, the ministry would send its comments and the Bill would then be tabled in Parliament.