Within days of ordering accounts inspection of six state-run companies, the government has initiated an exercise to identify about 70 to 80 private companies whose accounts would be checked by the Registrar of Companies (RoC) to prevent any recurrence of Satyam-like frauds.
The corporate affairs ministry, according to official sources, will be ordering inspection of the books of private companies to ensure that they are complying with the provisions of the Companies Act.
A number of new telecom companies, who have been awarded licences to start mobile services in India only last year, may figure in the list of entities whose accounts would be inspected by the RoC, sources added.
The corporate affairs ministry is currently looking into the ownership pattern of some of the telecom companies. The companies that got telecom licences last year include Swan Telecom, Loop Telecom and Unitech among others. Earlier in the week, the government ordered inspection of the account books of six public-sector companies under Section 209A of the Companies Act following complaints that they were not filing mandatory documents with the RoC or the auditor made adverse comments in their reports.
The government’s decision to inspect the books of the companies came on the heels of confessions made by B Ramalinga Raju, the founder of IT major Satyam Computer Services, of the biggest-ever accounting fraud in the country. Raju confessed to Rs 7,800-crore manipulation in the books of Satyam following which the government ordered a probe by the Serious Fraud Investigation Office into all its subsidiary firms.
The sources said the inspection in any company is ordered on the basis of complaints received from stakeholders; default in filing annual returns or adverse remarks from auditors. The inspection ordered in the private companies is based on complaints received from certain quarters, the sources added.
