Vigilant after Satyam scam, the government said on Thursday it will take steps to allow investors to seek compensation from companies in an event of negligence or fraud, a move that would protect investors' interests.
"The government has taken several steps to protect interests of investors. The Companies Bill, 2009, which is before the Parliamentary Standing Committee, has allowed Class Action Suit for the first time in the country," corporate affairs minister Salman Khurshid said in the Lok Sabha.
This and other initiatives like early warning are being introduced through the new Companies Bill to avoid another Satyam-like situation, he said during Question Hour.
Supriya Sule asked whether the government has decided to set up a specialised Research and Analysis wing to scrutinise media reports, corporate press releases and advertisements which can have a bearing on share prices of companies to avoid corporate frauds.
To this, the minister said, "The government has set up a market research and analysis unit in the serious fraud investigation office with the objective of improvements in the regulatory system in corporate sector."
The new unit will collect information from various sources including media, investigating agencies, employees, investors, deposit holders, banks and financial institutions and analyse the trends.
Khurshid said the government has taken comprehensive steps, including strict penalty and greater participation of shareholders among others to 'avoid another Satyam fraud.'
The new unit would analyse all the completed investigation cases to ensure that the process was followed in letter and spirit.
"Any deviation and its resultant effect on the outcome of investigation would be brought out to form a base for further improvements in investigation skills," he said.
Image: Salman Khurshid
