The regional director of the western region, a joint secretary level officer, has complained to the ministry that the investigation officers under him lack experience and has warned that if the matter is not looked into with urgency, then it could impact the quality of probe reports adversely. The western region is the largest wing of the MCA with the countrys largest RoC of Mumbai under its aegis.
Recent cases probed by the western region office include the allegations that telecom firms Swan and Loop were associates of Reliance Telecom and Essar, respectively (in both cases, the probe found the charges were unfounded).
The letter written by regional director SM Ameerul Millath to the ministry on August 10 assumes significance since this very department found itself in a middle of a controversy when it did a complete U-turn earlier this year, noting that Essar held only 2.15% stake in Loop Telecom as opposed to its earlier stand (in 2009) when it said the Ruias had held 9.9% stake in the company.
This had prompted the Central Bureau of Investigation (CBI) to reject the MCA findings.
I wish to share/air my concern as to the capability of the officers of the RoCs and the lack of expertise in a specialised area like inspection and the possible adverse impact that it may leave in the quality of the inspection reports if those are done by relatively junior level officers of RoCs, Millath has written to the director (inspection & investigation) of the ministry.
The note was part of a status report on all pending investigations for the month of July. Millatth also complained that the investigation officers had lack of time and experienced work pressure which will also need to be considered before entrusting inspections to them. I request the ministry to review the above in the interest of smooth execution of enforcement functions under the Companies Act, 1956.
An MCA official told FE that the officers in the regional offices were overburdened and it required immediate attention. There is a problem of lack of skilled manpower to conduct investigations. The issue has been repeatedly brought up but to no avail, he said.
The western region is the largest wing of the MCA since the maximum number of companies are situated in that region, the MCA source said. Apart from the western region, there are five other investigation regions North, South, South-West, East and North-East.
A matter such as this is grave and needs to be looked into seriously. It should not be taken lightly since any error in reports can cause damage to a corporate house, a senior corporate lawyer who did not wish to be identified said. At present, there are close to 30 cases pending with the western region of MCA.