Cabinet of India approves Fugitive Economic Offenders Bill 2018

In a major step to rein in economic offenders, Cabinet approves Fugitive Economic Offenders Bill 2018; Bill empowers govt to seize all properties of the fugitive offender within the country; accused will not be entitled to file a civil claim.

The centre has path breaking measures to curb financial crimes that often originate at the banking systems in the country and have had a crippling effect on the economy.

The cabinet meeting took two major decisions that will go a long way to curb financial crimes in India and prove to be a major deterrent to the offenders.

The first step in curbing the financial crimes is the decision of cabinet to approve the Fugitive economic offenders bill 2018.

The bill has specific provision that will pave the way for declaring an economic offender a fugitive. It has provisions for attachment of the properties of the fugitive economic offender resulting from proceeds of crime; not only it has provision for confiscation of other property belonging to such offender in India and abroad, including benami property. The bill provides for Disentitlement of the fugitive economic offender from defending any civil claim. An Administrator will be appointed to manage and dispose of the confiscated property under the Act.

The scam at Punjab National Bank has also prompted a move on setting up a new agency to regulate and discipline auditors. Cabinet has okayed setting up of the National Financial Reporting Authority as per the Companies Act. The decision aims at establishment of NFRA as an independent regulator for the auditing profession.

NFRA would have jurisdiction for investigation of chartered accountants and their firms. The jurisdiction of NFRA would extend to listed companies and large unlisted public companies. The thresholds for the same shall be prescribed subsequently in the Rules. The government would have the authority to refer such other entities for investigation where public interest would be involved.

Govt also made it clear that the Institute of Chartered Accountants of India will continue to perform its functions on all other entities.

The need for establishing NFRA has arisen in wake of accounting scams, to establish independent regulators, independent from those it regulates, for enforcement of auditing standards. It is also required to ensure the quality of audits to strengthen the independence of audit firms and enhance investor and public confidence in financial disclosures of companies.