"It should only take place in cases where the firm refuses to co-operate in the proceedings in question or if the higher management of thefirm is involved in the fraud," said the report adding that necessary changes to the companies act and the chartered accountants act may be identified after a thorough examination of all relevant issues.The committee, chaired by corporate affairs secretary Injeti Srinivas, has recommended that 23 out of the 66 compoundable offences under the Companies Act be dealt with an in-house adjudication framework with penalties to be levied by an adjudicating officer.The 11-member panel has batted for omission of seven compoundable offences, limiting punishments under 11 compoundable offences to only fines and suggested that five other offences be dealt with alternative frameworks. It has, however, not recommended any change in non-compoundable offences that mandatorily require imprisonment upon conviction.This is part of a larger move by the government to decriminalise offences under the Companies Act. Earlier this year, it passed an amendment re-categorising 16 offences as civil offences. A criminal offence can lead to imprisonment in the event of conviction, while a civil offence attracts a penalty.The panel said that a provision be added to the Companies Act to allow the government to increase the thresholds beyond which companies must spend on CSR activities. It has sought a provision to waive off penalties for late filing of annual returns or financial returns if the pending documents are filed within 30 days of the government issuing a show-cause notice.Experts say the move is much needed to boost the sentiment in an environment of economic slowdown.

Source: Economic Times November 18, 2019 12:19 UTC