MCA issues Order for removal of difficulties related to appointment of auditors in Partly Government Companies

MCA issues Seventh Order for removal of difficulties which relates to appointment of auditors in Partly Government Companies

The Ministry of Corporate Affairs has come out with the Companies (Removal of Difficulties) Seventh Order, 2014 dated September 4, 2014 in order to remove difficulties relating to appointment of auditors in partly Government Companies.

Section 139(5) and 139(7) of the Companies Act, 2013 (“the Companies Act”) provide for power of the Comptroller and Auditor-General of India to appoint an auditor duly qualified to be appointed as an auditor in a Government company or any other company owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments.

Whereas Section 143(5) of the Companies Act which provides for power of the Comptroller and Auditor-General of lndia to conduct supplementary audit does not specifically cover Companies owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments.

Thus, in order to remove difficulties arising in implementation of Section 143(5) of the Companies Act for Companies referred in Section 139(5) and 139(7) thereof, in Section 143(5) of the Companies Act, following shall be substituted for the portion beginning with the words “In the case of a Government company” and ending with the words “required to be audited and”:

“In the case of a Government company or any other company owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, the Comptroller and Auditor-General of India shall appoint the auditor under sub-section (5) or sub-section (7) of section 139 and direct such auditor the manner in which the accounts of the company are required to be audited and”.

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)