In case you are hoping for quick justice for those who have suffered due to the irregularities at Satyam, then your hopes are likely to be dashed.
India has one of the poorest conviction rates in cases of corporate frauds, and on an average such cases are not decided before five years, official records show.
More than 50,000 cases related to offences committed under the Companies Act are pending in courts. “Conviction rate in cases of corporate frauds is not more than 5 per cent,” said a government official, not willing to be named.
In comparison, a corporate fraud task force set up by US President George W Bush in 2002, secured 1,236 convictions in five years. Among those held guilty included the top officials of Enron and World Com companies. In the UK, the serious frauds office has an average conviction rate of 61 per cent in frauds cases during the past five years.
In India, the ministry of company affairs set up a committee in 2005 to streamline the prosecution mechanism under the Companies Act. It pointed out major flaws in the existing system. The failure to categorise cases and give priority to cases of serious frauds is clogging the courts and leading to huge delays, it said.
It recommended withdrawal of petty cases, separate courts for cases of serious frauds and a time limit to decide these cases. None of the recommendations has been implemented so far.
Another committee headed by former Chief Justice of India MH Kania had suggested changes to the existing law. “There should be a provision for hefty monetary penalty to be imposed on companies providing false information knowingly to SEBI,” it said. The 2005 recommendation has not been accepted till now.