Three days after the Prime Minister indicated that bribes in the private sector will be treated as a crime in the same way it is in the public sector, the government has firmed up its action plan.
A committee, headed by Kiran Karnik, one of the key technocrats to have led the outsourcing boom in the country, will form a comprehensive policy that will clearly stipulate penalties for corrupt practices in private sector dealings. The policy will form the basis for amending laws that will treat bribery in private sector as a criminal offence.
The panel headed by Karnik has been mandated to draft the corporate governance policy amid a growing chorus of voices advocating the need for laws to make transactions in private sector more accountable and transparent.
“We want to frame a concrete policy on corporate governance which includes the best international practices,” M Veerappa Moily, corporate affairs minister told HT.
As reported in HT on October 10, the government is planning to add a chapter in the Indian Penal Code (IPC) to charge private companies and their officials with criminal offences if found to have been involved in giving and receiving bribes to and from other private firms and employees.
The government is also planning to empower the Serious Fraud Investigation Office (SFIO), an agency mandated to probe corporate scams, with a statutory status armed with the authority to file chargesheets, impose punitive measures and in specific instances, even arrest persons found guilty.
The Companies Bill, which the government expects the parliament to clear in the forthcoming winter session, will contain specific clauses defining “fraud” and SFIO. The SFIO report will be treated in a manner similar to police report. This will allow faster prosecution, an official said.