K.R. Srivats | New Delhi, June 12 |
Says MCA Secretary Rajesh Verma at an NFRA-organised Iconic Week event
The Centre is looking into measures that may be needed to strengthen the National Financial Reporting Authority’s financial and operational autonomy, Rajesh Verma, Secretary, Ministry of Corporate Affairs (MCA) has said.
For this purpose, MCA will be guided by the recommendations made by the Company Law Committee’s third report submitted in March this year, Verma said at an NFRA-organised Iconic Week event to commemorate 75th year of India’s independence.
NFRA, which was set up in 2018, is the country’s sole independent audit regulator with powers of oversight on auditors of all listed companies and large unlisted companies. among others.
‘Include suitable amendments’
It may be recalled that CLC had recommended that provisions concerning financial autonomy as is present for other regulatory bodies may also be incorporated for NFRA. The Committee was of the opinion that suitable amendments be made to the Companies Act 2013 for the constitution of an NFRA Fund. Currently, NFRA receives its funding entirely from the Central Government.
The CLC was also of the opinion that NFRA should be empowered to take appropriate action against other contraventions in addition to its existing powers to take action against “professional or other misconduct”.
Specific provisions needed
There should also be specific provisions to enable NFRA to initiate appropriate penal action in case its orders are neither complied with nor any appeal against such an order has been filed in the NCLAT, the CLC had recommended.
The CLC had recommended that NFRA should be enabled to make regulations for specific matters such as form and manner of filing information with NFRA, and place, timing, and procedure to be followed for meetings of the NFRA. However, it suggested that such powers should be sufficiently encumbered with safeguards.
The CLC was also of the opinion that Section 132 of the Companies Act 2013 be suitably amended to provide the NFRA Chairperson with powers of general superintendence and direction within NFRA.