Corporate frauds: Government to encourage whistle-blowers to report suspicious activities

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New Delhi | Published: April 30, 2018 6:19:12 PM

The government plans to encourage whistle-blowers to inform it about suspicious activities at corporates and is working to link Aadhaar details of stakeholders with filings made under the companies law, Union Minister P P Chaudhary has said.

Corporate frauds, whistle blowers, Aadhaar, P P Chaudhary, MCA 21 portal, Companies Act, illicit fund flows, SFIOAccording to Chaudhary, the ministry has already asked individual stakeholders to obtain Aadhaar at the earliest for “integrating their details with MCA 21”. (File – Twitter/Ministry of Finance)

The government plans to encourage whistle-blowers to inform it about suspicious activities at corporates and is working to link Aadhaar details of stakeholders with filings made under the companies law, Union Minister P P Chaudhary has said. Embarking on multi-pronged efforts to clamp down on illicit fund flows, the corporate affairs ministry has already struck off the names of 2.26 lakh companies from the official records for not carrying out business activities for long besides ordering probes into the affairs of many such entities.

“We would also encourage the whistle-blowers to come forward to inform the government, concerned authorities about any suspected activities, if they come to know about any such wrong things,” Chaudhary told PTI in a recent interview. The Minister of State for Corporate Affairs said linking of Aadhaar details with company filings would help ascertain the authenticity of the individuals concerned.

The ministry aims to tackle the issue of bogus identities in filings of the companies at the MCA 21 portal and the step to link Aadhaar details is proposed to be taken to deal with the “menace of shell companies, suspected to be used for laundering illicit funds”, he said. Filings under the Companies Act are submitted to the ministry through MCA 21 portal. According to Chaudhary, the ministry has already asked individual stakeholders to obtain Aadhaar at the earliest for “integrating their details with MCA 21”.

“The idea is to have a system in place which would help in identifying the stakeholders whose names come up in the filings made through MCA 21. “Aadhaar number along with the filings would help ascertain the authenticity of the individuals,” Chaudhary, who holds Minister of State for Law and Justice portfolio, said.

In recent times, there have been rising instances of corporate misdoings and quite a few cases have been referred for detailed probe by the Serious Fraud Investigation Office (SFIO). The SFIO comes under the corporate affairs ministry. Chaudhary said the ministry and markets regulator Sebi are vigilant to safeguard the interests of the investors. “As far as educating the investors is concerned, the investors are advised to exercise due diligence before considering investment in any company,” he added.

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