New Delhi, Jan. 8: After the rap across the knuckles delivered by the Joint Parliamentary Committee (JPC) investigating the stock scam of 2001, the Department of Company Affairs (DCA) has set up a six-member committee to take action on the JPC recommendations within six months. Rajiv Mehrishi, a joint secretary in the department, will head the task force.
Three other members of the committee from the DCA are R. Vasudevan, director, inspection and investigation, economic advisor M. N. Mathur, and deputy secretary Pawan Kumar. V. S. Rao, who is also director, inspection and investigation in the department, is the convenor of the task force.
The committee will identify the areas in the JPC report where action can be taken and execute it within the time frame.
“Certain recommendations or observations will also require co-ordination and interaction with other departments and organisations. The DCA will undertake a process of dialogue to facilitate compliance of such recommendations,” the department said in a statement.
The JPC report on the stock market scam of 2001, which submitted its report recently, has put part of the blame for the scam on the DCA, along with other regulators like the Securities and Exchange Board of India (Sebi) and the Reserve Bank (RBI). “The JPC report has noted that the DCA does not have adequate regulatory powers,” the statement said.
In its defence, the department says its role in the stock market is actually quite marginal. “In so far as the companies involved in the scam are concerned, DCA has ordered 539 prosecutions which is more than twice the prosecutions launched after the 1992 scam,” the statement said.
The DCA says 58 of these prosecutions relate to misuse or diversion of fund under sections 63, 77, 295, 370, 372 and 372 A of the Companies Act, 1956.