Corporate Updates – 28-08-2017


The Serious Fraud Investigation Office (SFIO) now has powers to arrest people for violations of companies law, with the government notifying relevant provisions amid the crackdown on illicit fund flows. The ministry has notified the Companies (Arrests in connection with Investigation by Serious Fraud Investigation Office) Rules, 2017 pertaining to arrests in connection with Investigation by the SFIO and they came into effect from August 24. The director as well as additional or assistant director level officials at the SFIO can arrest a person if they believe he or she is guilty of any offence with regard to the case being probed, the ministry said in a notification. According to the ministry, the reason for arrest should be recorded in writing, however, in case of an arrest being made by additional director or assistant director, the prior written approval of the director SFIO shall be obtained. The SFIO director would be the competent authority for all decisions pertaining to arrest. Further, the arrest of a person in connection with a government or a foreign company under investigation can be made by the SFIO only with prior written approval of the central government. Besides, such arrest should be intimated to the managing director or the person in-charge of the affairs of the government company.


MCA has notified the National Company Law Appellate Tribunal (Amendment) Rules, 2017 which shall come into force on the date of their publication in the official Gazette. Rule 63 of the Rules have been amended w.r.t Appearance of authorised representative before the NCLAT. Apart from the existing authorisation to representatives of the petitioners and respondents, provisions have been inserted for the Central Government, the Regional Director or the Registrar Companies or Official Liquidator which may authorise an officer or an Advocate represent in the proceedings before the Appellate Tribunal and the officer authorised by any of such agencies shall be an officer not below the rank of Junior Time Scale or company prosecutor.

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