Disgorgement authority to help duped investors

Disgorgement authority to help duped investors

The disgorgement authority, which will be under the administrative control of the Corporate Affairs Ministry, was mooted in the aftermath of various stock market scams in which small investors lost crores of rupees.

Disgorgement means the forced giving up of profits obtained illegally or unethically. The Companies Bill 2009 has provisions for strengthening the disgorgement clause, which is at present “not precise” and “left to individual interpretation”, according to a senior official of the MCA.

“What we are planning is to set up a body, in the lines of the Serious Fraud Investigation Office (SFIO), whose main purpose will mainly be to trace and collect money from wrongdoers and distribute it among the duped investors,” the official said.

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