State bid to control
NBFCs’ operation
The state government has formulated
stringent laws to safeguard the interest of investors against Non-Banking
Financial Companies in a bid to counter the high rate of economic offences
by fly-by-night operators.
As many as 34 economic
offences have been registered and chargesheets have been filed in nine
cases which include several cases of cheating, embezzlement, forgery
and fraud.
The proposed Gujarat Protection
of Interest of Depositors ordinance will be tabled during the next session
of the Legislative Assembly in September for approval, minister of state
for home Haren Pandya said on Thursday.
"There have been several
cases of action been taken against non-banking financial companies but
there is a possibility of investors being duped due to absence of stringent
laws against the organisations," Mr Pandya said.
He added that the draft
laws against offenders proposes stringent laws against economic offences,
protect the interest of depositors and also has provisions of special
courts to take up cases of economic offences by NBFCs.
"The proposed actions include
cancellation of registrations of the organisations, attachment, sealing
and confiscation of the assets of the company and six years rigorous
imprisonment for those found guilty of violating the laws," Mr Pandya
said.
He said RBI officials will
also be involved in investigating the economic offences. The action
also includes heavy penal fine upto Rs 5 lakhs. Gujarat is most vulnerable
against economic offences, as 40 per cent of the subscriptions in public
issues and other investments are from the state, Mr Pandya said.
Giving further details
of the extent of economic offences the minister said, 185 complaints
have been received against NBFCs and the Reserve Bank of India has revoked
licenses of 700 companies, and as many as 250 companies have been asked
to close down. Mr Pandya said investigations will be done to ensure
that the organisations that have been asked to close down are not reopened
after action has been taken against them.
Similar laws to safeguard
investors’ interest have already been passed in six states of Maharashtra,
Tamil Nadu, Assam, Andhra Pradesh, Haryana and Madhya Pradesh.
Superintendent of the economic
offence cell S.G. Bhati informed that complaints have been received
against several companies including Piramal Finance, Jalaram Shroff,
Rapti Finance, Maxworth, Pan India Ltd and Anubhav Plantations in the
past one year.
Republished from Asian
Age
