The Ministry of Corporate Affairs will take action against National Spot Exchange Ltd (NSEL) whenever required, said Sachin Pilot, Union Minister of State for Corporate Affairs, on Monday.
He further said the ministry has received a report from the Registrar of Companies on the NSEL payment crisis.
Addressing the media at the Confederation of Indian Industry (CII) conference on the new Companies Act, Pilot said the ministry is keeping a watch on all NSEL developments.
In the event of any violation of law, the holding and associate companies of NSEL will also face action under the Companies Act, he said.
He pointed that due to the presence of multiple regulators, there are regulatory gaps in the NSEL issue. Steps are being taken to bridge those gaps.
The new Companies Act has properly defined fraud, which will help in taking action against companies accused of such violations.
The clear definition of fraud has come about due to scams such as Satyam Computer and Sharda Chit Fund.
New regulator
Pilot also said National Financial Regulatory Authority (NFRA) will soon be set up. It will be an overarching body that will look at all aspects of financial reporting.
It will have quasi judicial powers and carry out quality check on the auditors and audit process in the country. Carrying out checks on the auditors is mandated in the new act.
“Indian companies are going global and therefore they should follow the global standards of audit. NFRA will set those standards for the audit process,” Pilot said.
NFRA will not be a body dominated only by bureaucrats — experts from various sections of the society will also be a part of it.