From NSEL to Unitech: Govt uses Companies Act to defend 'public interest'

In both cases, the powers vested with it by the new Companies Act has proved to be useful in defending the 'public interest'

The government on Friday invoked the same provisions as it did for Satyam to take over the management control of real estate company Unitech. Though the case has been moved in the National Company Law Tribunal, which has acquired the moniker bankruptcy court, these are tougher charges—those of fraud, under section 447 of the Companies Act. If convicted the punishment can range up to ten years in prison.

 Under the Companies Act, the government can move the tribunal if it thinks that affairs of a company are being conducted in a manner prejudicial to the public interest.

Bankruptcy charges, by