During last five years i.e. from 2008-09 to 2012-13 a total of 782 inspection reports in respect of companies were received in the Ministry of Corporate Affairs. Based on the findings in the inspection reports, penal actions have been taken against the companies and their directors/officers in default for violation of various provisions of the Companies Act, 1956. Giving this information in written reply to a question in the Rajya Sabha, Shri Sachin Pilot, Minister of Corporate Affairs, said that the Ministry has taken following steps to keep effective check on frauds/ irregularities committed by companies:

(i) An Early Warning System has been devised to generate alerts on the basis of certain parameters;

(ii) Market Research and Analysis Unit has been set up in the Serious Fraud Investigation Office; and

(iii) Certain class of companies have been mandated to file their balance sheets in Xtensible Business Reporting Language (XBRL) mode for analysis of data and generation of alerts on the basis of certain parameters.

KKP/sg

(Release ID :95358)

Penal action against fraudulent companies strengthened by reporting requirements and alert systems to detect corporate irregularities. Penal action has been taken against companies and their directors/officers for violations of the Companies Act, 1956 based on inspection reports; to enhance detection and prevention the Ministry implemented an Early Warning System, created a Market Research and Analysis Unit within the Serious Fraud Investigation Office, and mandated XBRL filing of balance sheets for certain classes of companies to enable data analysis and alert generation.