Search to prevent document-shredding: DCA

In a startling disclosure, the Department of Company Affairs, which conducted searches on accounting firm A F Ferguson8217;s Mumbai office ...

In a startling disclosure, the Department of Company Affairs, which conducted searches on accounting firm A F Ferguson8217;s Mumbai office on Monday in the wake of audit relating to the Tata Finance scam, said they started inspection of the audit firm after they came to know that Ferguson was planning to shred related documents.

8220;DCA got to know on Sunday afternoon that Ferguson was shredding documents relating to Tata Finance and we began a search and seizure operation of Ferguson8217;s Mumbai office last evening. If needed, we may extend the probe to include inspection of Ferguson8217;s books under sections 209 A inspection of Ferguson8217;s books and 237 fraud also,8221; DCA officials said.

In a statement, DCA said the court has allowed the petition of DCA preventing the destruction of any record pertaining to Tata Finance.

The petition under Section 234 A came up for hearing in the court of the judicial magistrate in Mumbai. Consequently, a six-member DCA team, headed by Registrar of Companies RoC, Mumbai, had conducted a 8216;search and seizure8217; operation at the Ferguson office under section 234 A of the Act after DCA obtained the permission of the court for the purpose.

According to section 234a of the Companies Act, the RoC can approach a first class judicial magistrate for seizure of documents, books and papers of a company or an executive of such a company, if he believes that these papers may be destroyed, mutilated, altered, falsified or secreted.

DCA officials say the probe may be extended to inspection of available data under provisions which also relate to fraud. Acknowledging that the Department has received the report Ferguson has compiled on TFL besides the company8217;s books of accounts for the last five years, officials said while Ferguson8217;s was not the statutory audit report of TFL, it could still be used to detect if any irregularities were committed by the company.

Section 209A enables DCA to launch an inspection of Tata Finance8217;s books without giving the company any prior notice. Failure to comply with the inspection by any official could result in imprisonment of up to one year along with a fine of up to Rs 50,000.

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Talking to The Indian Express, DCA secretary V K Dhall said 8220;our team is continuing with the search as there are 2-3 premises of AF Ferguson to be covered and the report is still awaited. In any case the probe will be on and we may inspect the available data as well to arrive at a conclusion8221;, he added.

Meanwhile, the controversial page 60 of the review of operations of Tata Finance Ltd TFL, involving its investments in Niskalp Investments 038; Trading Company Ltd Niskalp, has finally surfaced. The page is now famous for having been allegedly removed from the April 30, 2001 presentation to the TFL board by ex-TFL vice chairman Kishore Chaukar on the grounds of the document containing unsubstantiated figures.