Dr. Justice V.S. Malimath Report First pages - Ministry of Home Affairs

244
the Director and the Inland Revenue will be that when the
Director carries out his taxation functions, the source of income
need not be identified.
?? Seeking and executing requests for international assistance in
obtaining restraints and confiscation and the use of powers of
investigation.
20.20.3 The Agency will take on cases only on the basis of referral from
the Police, Customs and law enforcement authorities based on agreed criteria.
20.20.4 It may be noted that ARA has functioned only for a short period,
and therefore it is too early to assess its success.
20.21 THE REGULATORS AND THE SERIOUS FRAUD OFFICE
20.21.1 Disclosure has been a long accepted in principle in Corporate Law
to prevent fraud and to protect investors’ interest. But with a large bureaucracy
both Government and quazi-Government, such disclosure has been partial,
delayed and often misleading and has served little purpose. The line between
near crime and crime is so fine (as for example between tax avoidance and tax
evasion) that criminal liability is not something, which could be pinned upon a
suspect easily. Even the quite useful
standard procedures of accounting as
well as independent auditing have ceased
to ensure corporate responsibility or even
basic accountability. Bankruptcies, flyby-night
operations, sudden and repeated
mergers, de-mergers and acquisitions,
stock market failures, money laundering
etc., have raised serious doubts about
accounting and auditing processes not to
mention good business practices in
corporate governance itself. When
Bankruptcies, fly-by-night
operations, sudden and repeated
mergers, de-mergers and
acquisitions, stock market
failures, money laundering etc.,
have raised serious doubts about
accounting and auditing processes
not to mention good business
practices in corporate governance
itself.
corporate governance fails, particularly in the financial sector, the impact is felt
by the rich and the somewhat poor indiscriminately and often substantially.
There is also the need to define the roles of regulators and demarcate the fine
line between the regulators and the criminal investigation machinery. This is of
course not common to our country alone but with increasing liberalisation and
opening up of the economy, there is a need to improve monitoring, ensure
proper disclosures, keep track of major and suspicious transactions,
simplification of procedures and greater co-ordingation between regulators,
enforcement agencies and the police.