After the Securities and Exchange Board of India, the department of company affairs is planning to link penalties to the size of the offence.
While the offence-wise penalties are yet to be decided, official sources told Business Standard that the broad contours of the new penalty system had been worked out by a committee headed by corporate lawyer Shardul Shroff.
The committee, looking into a variety of issues, including enhancing penalties, is expected to finalise its report over the fortnight.
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Linking the penalty to the size of the offence was one of the options mooted by the department itself, the sources said.
Secretary in the department of company affairs VK Dhall has said inadequate penalties were failing to deter corporate wrongdoing.
They indicated that the penalties would range from half the amount involved in an offence to three times the size of the offence, as is the case with the amended Sebi Act, where the penalty for insider trading, fraudulent and unfair trade practices and non-disclosure in case of a takeover has been enhanced to Rs 25 crore, or three times the amount of profit made out of the violation, whichever is higher.
In a majority of offences, the fines have been raised to Rs 1 lakh per day, subject to a ceiling of Rs 1 crore.
The sources also said the department had also proposed linking the penalty to the turnover of the company and a distinction be made between the offence committed by a large and a small company.
Officials said in last year