Misuse of Public Issue Funds by Companies
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The Minister of State in the Ministry of Corporate Affairs today informed the Rajya Sabha that such complaints relate to misuse of public issue funds by way of diversion of funds, non-fulfillment of terms and conditions for the completion of the projects as per the time schedule given in the prospectus, non-traceability of the companies and their directors; etc;
Replying to a written question the Minister said where any company is found violating the provisions of the Sections 62, 63, 68 and 628 of the Companies Act, 1956, prosecutions are filed against such companies and their officers in default. In case of non-availability of the companies and their directors, FIRs are filed. If circumstances warrant, private detective agencies are also engaged to trace out the disappeared companies and their directors. The Ministry has also devised e-Form to be filed by the companies which came out with IPO so as to monitor the utilization of funds raised through IPOs and also, to detect the diversion of funds.
During 2007-08, 2008-09 and 2009-10, 11, 27 and 27 cases respectively were filed against the companies for violation of provisions of Sec. 63, 68 and 628 of the Act.
Category : Corporate Law | Comments : 2 | Hits : 395
Comments
Krishnendu Baran Sarkar
09-Aug-2011 , 01:18:56 amThis means that auditors role could be widened under these circumstances. Currently under CARO comment by an auditor is only limited to verification of end use of money raised by public issues which may be widened to cover reporting of actual deviations too.
Krishnendu Baran Sarkar
09-Aug-2011 , 01:19:38 amThis means that auditors role could be widened under these circumstances. Currently under CARO comment by an auditor is only limited to verification of end use of money raised by public issues which may be widened to cover reporting of actual deviations too.