Whts a CA.. something.. really true..

The corporate affairs ministry, which drafted a new company law from scratch and introduced it in Parliament last year, is now co-ordinating the 

Corporate Affairs Minister Prem Chand Gupta

probe into one of the most carefully crafted corporate frauds the country has seen. Prem Chand Gupta , who heads the ministry, spoke about the issues involved in the ongoing probe against Satyam as well as the larger issue of a modern legal framework that would act as a true deterrent and deliver justice without the delays that usually plague the Indian judicial system.Excerpts: 



We hear about US investors in Satyam taking legal action against the company. Can the government grant immunity to the newly-appointed directors against any legal action from those investors? 

We can give immunity to directors as per Indian laws, not as per American law as it is outside our purview. However, capital market regulator Sebi is in touch with the Securities and Exchange Commission on matters pertaining to regulatory action by American authorities. But there is no question of the Indian government providing immunity against legal action by American investors. 



In India, the judicial process is time consuming. What is the government doing to ensure that judicial delays actually do not deny justice to the affected? 

It is important to note that the proposed new company law addresses this issue. We have proposed setting up special courts to deal with company law violations and fraud. Besides, the penalty provisions are made far more stringent. We have introduced high monetary penalty in addition to imprisonment for many violations. In some cases, the monetary penalty can be as high as the loss suffered by an action of the wrongdoer. These two measures would ensure speedier criminal prosecution, justice delivery and stronger deterrence. Many of the offences that are compoundable in the existing law have been made non-compoundable in the new law. Had these provisions become law today, the fate of the Satyam case would have been different. 



You recently told us that it is not the number of independent directors on the board of a company that determines its corporate governance. Would you revisit the provision in the proposed new Companies Bill, 2008 requiring companies to reserve one-third of their directorships to independent directors? 

The new Companies Bill is with a Parliamentary standing committee. There is no question of us reviewing it now. But the committee will seek the views of all concerned in law making and would give its suggestions. Based on the committee’s report, we will take a view. 



What is the government’s road map for reforming the audit and accounting norms to address the kind of negligence or violations that we saw in the case of Satyam? 

There appears to be enough provisions in the existing regulations. The Institute ofChartered Accountants of India has a strong disciplinary mechanism. We need to appreciate that the rule of law gives any accused the right to a hearing before action is taken. If experience shows that the ICAI Act provisions are not good enough, then we will review them.