New Delhi, Feb 24 (ANI): Union Corporate Affairs Minister Prem Chand Gupta today said that an investigation into the affairs of Satyam Computer Services Limited is being carried out by officers drawn from the Serious Fraud Investigation Office (SFIO) after orders were issued by the Government under the Companies Act, 1956.
In a written reply in the Rajya Sabha, he said: "In addition, investigations are also being carried on with regard to the Company by Central Bureau of Investigation (CBI), Securities and Exchange Board of India (SEBI), Institute of Chartered Accountants of India (ICAI) and Income Tax Authorities."
On the basis of orders of the Company Law Board on a Petition moved by the Government, Gupta said that the previous Board of Directors of the Company has been suspended and six new directors appointed by the Government.
"The events relating to Satyam Computer Services Ltd. relate to a particular company and do not represent a failure of the regulatory system and relevant regulatory authorities," he added.
He said that an elaborate regulatory framework is already in place to deal with such incidents.
"This framework provides for statutory disclosures about the affairs of companies intended to inform the stakeholder the truth about the state of affairs of companies. To facilitate making of such disclosures by companies, and for stakeholders and regulatory agencies to easily access and view them, Government has set up an electronic registry with round the clock access through internet," he said.
The Minister further added that the Government has powers of inspection of the books of accounts of companies and also to investigate their affairs, if need be, under the Companies Act, 1956.
"In addition, the Act provides for appointment of independent, statutory auditors to audit the accounts and report to the shareholders. Such audited accounts are also displayed on the electronic registry for general viewing. While the reporting requirements are regulated under the Companies Act, 1956, the conduct of auditors is regulated under the Chartered Accountants Act, 1949," he added.
In addition, for listed companies, compliance with these statutory requirements is required to be certified by a company secretary in practice, who in turn is regulated under the Company Secretaries Act, 1980.
The Government has amended the Chartered Accountants Act, 1949 and the Company Secretaries Act, 1980 in 2006 to provide for a more effective disciplinary mechanism to deal with cases of misconduct by Chartered Accountants and Company Secretaries respectively.
In 2006, the Government has also notified Accounting Standards to enable accounts of companies to be drawn up and disclosed on the basis of fair, transparent and internationally accepted principles.
The Government has also introduced Companies Bill, 2008 in the Lok Sabha to provide for a comprehensive revision of the Companies Act, 1956 including, inter alia, provisions that would enable more effective checks against irregularities/frauds by companies. (ANI)