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Promoters of 73000 companies likely to face action over fraudulent transactions post demonetisation: Report

Government is also trying to strengthen the Serious Fraud Investigation Office (SFIO) for better investigations over financial fraud cases.

The government in all likeliness is prepared to act against promoters of 73000 companies in which fraudulent transactions after the demonetisation drive has been detected.

Minister of state for corporate affairs, PP Chaudhary told Economic Times, “We have identified 73,000 companies in which Rs 24,000 crore was deposited after demonetisation. The investigation is being undertaken by various agencies.” He furthered that initially, 1.26 lakh companies were identified were unusual transactions were uncovered. Accounts of such companies were used only to hoard money. But the number reduced after a preliminary probe.

Speaking about IL&FS, which had defaulted on debts, Chaudhary said the Serious Fraud Investigation Office (SFIO) probe is on and the government will look at the report to bring structural reforms on corporate governance.

Talking about strengthening the corporate governance norms, he furthered that the ministry is closely working with the Indian Institute of Corporate Affairs to improve governance standards in boardrooms.

Chaudhary mentioned that the government is looking into making the role of independent directors more active. He said the ministry is considering introducing an orientation programme for independent directors, initially for public sector companies, after which for the listed companies, in which they will be familiarised with their duties and dos and don’ts.

Chaudhary informed that the government was looking at strengthening the premier investigation agency-SFIO, which is currently probing 64 cases of alleged fraud involving 500 companies. The minister said the names of about 3.25 lakh shell companies have been struck off during the investigation.

Maintaining that the insolvency and bankruptcy code has been the biggest economic reform since independence, because of which many debtors have paid off the dues on their own, PP Chaudhary said that the government will soon make more changes in the Companies Act of 2013 to improve the ease of doing business. “It could be done through an Ordinance. We’re deliberating the changes and the process through which changes would be made,” Chaudhary said.

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