Fraudulent Activities by Companies
The Ministry of Corporate Affairs has received complaints against certain companies for allegedly defrauding investors by offering high returns. Giving this information in written reply to a question in the Lok Sabha recently, Shri Sachin Pilot, Minister of Corporate Affairs, said that during the last three years and the current year, the Ministry has ordered investigations into the affairs of 125 such companies under sections 235/237 of the Companies Act, 1956 mostly through the Serious Fraud Investigation Office. He said that his Ministry has already taken various steps to curb such malpractices, such as:
(i) The Minister has requested Chief Ministers of the States to issue instructions to State Police Authorities for taking vigorous action under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
(ii) The Minister has also written to the Hon’ble Finance Minister to increase the surveillance by RBI over unauthorized NBFCs.
(iii) Undertaking investor awareness programmes in association with the Institute of Chartered Accountants of India, Institute of Company Secretaries of India and Institute of Cost Accountants of India, specifically targeting investors in tier II and tier III cities.
(iv) Publication of a comprehensive guide in English and two smaller booklets in English, Hindi and 11 vernacular languages for use of investors. These booklets are distributed to all investors participating in the investor awareness programmes.
(v) Issue of multi-lingual print media advertisements from time to time to caution the investors about fraudulent investment schemes.
(vi) Undertaking media campaigns through DD News Channels and Regional Kendras of Doordarshan.
(vii) Publishing a brief investors’ awareness message on Post Office Savings Bank Passbooks.
(viii) A system of sending bulk SMSs introduced cautioning investors to be careful while making investments.
A client of ours. a private limited company has over-booked payment made and accordingly TDS deposited as on 31-3-13. In fact they have paid much less and TDS, is also according to the actual payment made. This over-booking by Client can cause heavy liabilities on us by way of Income Tax, Sales Tax and Service Tax. What can we do in this case and what remedies are available to us avoid additional liabilities which are not due to any of our fault?