Citizens' Issues
Whistleblowers can get security from government

The CVC would take up the matter with home ministry to undertake the responsibility of providing security cover to the genuine whistleblowers

 

Whistleblowers or people exposing corruption can get security from the government, the Lok Sabha was informed on Wednesday.

The Indian government has authorised chief vigilance officers (CVOs) of ministries or departments of the central government as designated authority to receive any written complaint or disclosure on any allegation of corruption or misuse of office in respect of any employee working under them.

If the designated authority in the ministries or departments, either on the application of the complainant, or on the basis of the information gathered, is of the opinion that the complainant needs protection, the designated authority shall take up the matter with the Central Vigilance Commission (CVC) for issuing appropriate directions to the authorities concerned, the government  said.

In a written reply, Jitendra Singh, minister of state for personnel, public grievances and pensions, said, "The Commission, after receipt of such reference from the designated authority, takes up the matter with the Ministry of Home Affairs, the nodal agency, to undertake the responsibility of providing security cover to the genuine whistleblowers".

The Home Ministry, in turn, asks individual state governments to examine the threat and provide security cover, if needed, he said.

"On the advice of Ministry of Home Affairs, state governments have appointed nodal officers in respective states and details about these officers have been communicated to the Commission for referring the matters to them," the Minister said.

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Now, govt. staff will have to declare assets annually

Its now mandatory for government servants to declare their assets annually. Section 4 of the RTI Act mandated transparency only in terms of their salary and compensation. Strangely, the new rules have not been pubicised

 

Section 4 of the Right to Information (RTI) Act mandates that salaries and compensation packages of government servants including officers from Indian Administrative Service/ Indian Police Service (IAS/IPS) cadre, be put up on the website of the relevant public authority. The notification issued last week by the  Department of Personnel & Training (DOPT) should come as a shock for government employees who have been amassing wealth, beyond their means. They will need to declare their assets by September this year and then by March or July, every year.

Every government employee is now required to file his annual returns pertaining to assets and liabilities, along with that of his wife and children, on a newly drafted declaration form. The notification is a sequel to the Lokpal and Lokayukta Act, 2013. The rules are termed as Public Servants (Furnishing of Information and Annual Return of Assets and Liabilities and the Limits for Exemption of Assets in Filing Returns) Rules, 2014.


As per the notification by the DoPT, this declaration has to be made by every government servant over and above other declarations as per his/ her services rules.

Section 3 (2) states...


(1) Every public servant shall make a declaration of his assets and liabilities under sub-section (1) of section 44 in the format specified in Appendix-1, along with information required under sub-section (2) or as the case may be, sub-section (3) and the annual return under sub-section (4) of section 44 in Forms I to IV specified in Appendix-II.

Every public servant shall file declaration, information or return, as the case may  be, regarding his assets and liabilities as on the 31st of March every year, to the  competent authority as referred to in clause (c) of sub-section (1) of section 2 on or before the 31st of July of that year.

Provided that the public servants who have filed declarations, information and annual returns of property under the provisions of the rules applicable to such public servants shall file the revised declarations, information or as the case may be, annual returns as on the 1st day of August 2014, to the competent authority on or before the 15th day of September, 2014.


The exemption clause is: “(4) minimum value of assets which competent authority may exempt from furnishing of information - …..if the value of such asset does not exceed four months basic pay of the public servant or Rs2 lakh, whichever is higher.’’

While this notification is the ultimate step towards transparency, Venkatesh Nayak, research scholar and activist, who has been working on matters about laws relating to transparency states that, this notification is deliberately not being made public and publicized. He says “According to the text of the gazette notification of the Rules, it was to be published in the Official Gazette on 14 July 2014. However this set of Rules has not been uploaded either in the Ordinary Gazette Section or the Extraordinary Gazette Section of the E-gazette website of govt of India (GoI). These Rules do not come up under the 'What's New' Segment of DoPT's website either. Instead, it is tucked away in the Circular Portal of GoI, which is password protected. However, readers may access it through Google by keying in the complete title of the Rules.”

 


The notification is of prime importance, considering that RTI applicants used to be stonewalled when they filed applications to procure information on disproportionate assets of government servants. Some of them used to file second appeals, while some Information Commissions ordered disclosure of information contained in the immovable property returns submitted by civil servants every year, others rejected the request upholding the official's right to privacy.

“In at least one case, an RTI activist in southern India who sought such information about a senior level officer, had to be provided armed security as the request snowballed into a public altercation between the two,” Nayak said.

Who else does the notification cover?

 

As per Nayak’s study these Rules cover every public servant. He says, “The Lokpal Act covers all categories of public servants in Section 14. These include the Prime Minister, Union Ministers, Members of Parliament, civil servants, employees and managers of public sector undertakings, universities, boards, trusts and societies or autonomous bodies wholly or partly financed by the Central Government and any organisation which receives foreign contribution of more than Rs10 lakh per year ($16,950 where 1$= Rs59) under the Foreign Contribution Regulation Act, 2010 (FCRA).

Does PM come under this notification?

 

According to Nayak, the Prime Minister is the competent authority for receiving declarations of assets and liabilities of the Union Ministers as per the Code of Conduct adopted first in 1964 and revised later in 1992 (4th attachment). “This Code does not require the Prime Minister to disclose his/ her assets to anybody. However, Section 44 read with Section 14 of the Lokpal Act, requires the Prime Minister also to publicly declare his/ her assets. So the Government will have to notify who the competent authority shall be to receive the PM's first declaration and subsequent annual returns under this Act and make them accessible to the public. Perhaps it should be the President as he alone is higher in the executive hierarchy to the PM. GoI must issue a clarification on this issue. It is not clear if the templates notified by the DoPT are intended for the use of 'public servants' other than 'civil servants',” he added.

Certainly, citizens would be looking forward to details of assets of government servants coming out in the public domain. Moneylife had recently carried a story on the disproportionate assets of Pune’s Divisional Commissioner Prabhakar Deshmukh. No action has been taken on this yet. He continues in his position and there are thousands of such cases all over India. Will the scenario change?

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COMMENTS

Rajesh

2 years ago

Those Government servants who wary and not comply in filing and disclosing their assets invite serious action under code of conduct. When Ministers , M.P.'s, MLA's and even those who just file elections declare their assets online, why such hesitation and delay?

Those who delay should be suspended and are welcome to resign as thousands of young talent has been waiting to get absorbed to these lucrative and full of benefits jobs.

Rajesh

2 years ago

Government employees in recent years have ben living lavishly with no accountability to public. They consider themselves to be belonging to special class and public in fact as their servants.

Kudos to Government for asking these details. Those who are known to have possessed income well disproportionate to their salaries need to be sent to jail without any delay.

K S Ashokan

2 years ago

How will the government enforce these provisions against the family members of the Public servant, who are not under governmental control. It is not known as to how the provisions for declaration of assets of the family members/dependents including spouse of the public servant can be enforced if the spouse who has independent earning refuses to divulge their savings/other assets citing "privacy".

Can the MCA Fix those Deposit-takers?
Indian companies seem to get away by not paying back public deposits. Will the newly active Ministry of Corporate Affairs under Nirmala Sitharaman start acting in the interests of the depositors?
 
The ministry of corporate affairs (MCA), which has a dynamic new minister in Nirmala Sitharaman, needs to pay attention to companies that continue to cheat people by failing to repay fixed deposits to investors. The new Companies Act has made corporate deposits a tad safer by tightening net-worth norms and mandating credit rating (to assess the ability to repay deposits). But it does not help those who are already trapped.
 
MCA does not believe in stopping wrongdoing when it happens; it seems to act only when there is a complaint after a default. So it does not seem to stop cash-strapped realty companies from issuing front page advertisements promising high guaranteed returns on deposits. Kumar Urban Development Private Limited is issuing unrated, unlisted NCDs (non-convertible debentures) of Rs100,000 each promising a gross yield of 21.94 %. This is being pushed by finance companies to their private wealth management customers, because they are paid fat commissions. There are scores of similar offers, all playing on the greed, ignorance and blind trust of depositors in their agents/ wealth managers.
 
Meanwhile, the number of companies reneging on payments is rising and, although MCA has a smart online complaints form, the grievance redress is slow or non-existent. It is entirely dependent on the company’s willingness to pay rather than the fear of punitive action by the government. 
 
A sub-broker Amrish Shah, fighting for his investors, says he has been running from the company law board (CLB) to the registrar of companies (ROC) without success. The CLB website www.mumbaiclb.com lists several of its orders asking companies to pay; but nothing happens. Here is list of his findings. 
 
Asian Electronics committed to CLB that it would pay in instalments but isn’t doing so. Elder Pharma, whose shares trade at nearly Rs200, has not repaid depositors. Plethico Pharma, which also trades at twice its face value, is delaying payments by as much as 10 months and won’t pay interest. Realty companies Unitech Ltd, Ansal Housing and Ansal Properties are struggling to pay depositors and delaying interest payments.
 
Companies, such as Ankur Drugs & Pharma, Raj Oils Limited, Tricom India, Micro Technology, Neesa Leisure (unlisted), are not paying interest. Neesa Technology (also unlisted) has issued NCDs of Rs100,000 each with IDBI Trusteeship Services as the debenture trustee. Then there is Helios & Matheson, a controversial company, which is not repaying small depositors. However, its shares trade at Rs85 and the bourses as well as regulators are reluctant to investigate it. The company gave  post-dated cheques to depositors and then stopped payment while promising to issue new cheques. Depositors are still waiting. 
 
And then there is the entire Yash Birla group, which is causing enormous distress to depositors, even while Yash Birla is busy with launching his autobiography and his wife is opening jewellery stores. However, there is at least some action in this case. Birla Power Solutions has had two bank accounts frozen by the economic offences wing of the Mumbai police. Zenith Birla is another group company that is not paying depositors in time. These complaints are also before CLB; the group itself is also in trouble with the tax authorities. 
 
Moneylife has repeatedly cautioned savers to avoid unsecured, corporate fixed deposits; unfortunately, they continue to be extremely popular among middle-class investors who do not realise that the best and safest companies which have myriad fund-raising options are unlikely to use the fixed deposit route.

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COMMENTS

murlidar

2 years ago

Plethico pharma was delaying the interest by a few days but now nearly 45 days have passed and no sign of quarterly interest on fds

murlidar

2 years ago

Plethico pharma was delaying the interest by a few days but now nearly 45 days have passed and no sign of quarterly interest on fds

murlidar

2 years ago

The authorities are also to be blamed for this mess. On one hand overnight the rules were made so stringent that all companies werte forced to stop execpting all fixed deposits. hence, the flow of cash by way of new deposits stopped and a deadline was given to refund all fds by 31 march 2015. Hence the management is less interested in servicing the existing fds and delay as much as possible.

murlidar

2 years ago

The authorities are also to be blamed for this mess. On one hand overnight the rules were made so stringent that all companies werte forced to stop execpting all fixed deposits. hence, the flow of cash by way of new deposits stopped and a deadline was given to refund all fds by 31 march 2015. Hence the management is less interested in servicing the existing fds and delay as much as possible.

REPLY

Dayananda Kamath k

In Reply to murlidar 2 years ago

rightly said. it is the unimaginative regulators that are responsible for indian financial mess let it be sebi, rbi,irda,fmc and mca actually they are the sponsors of all the financial scams

veeraraghavan

2 years ago

Respected Mam, Ministry of CA, please look in to these matter and solve this issue, we deposited the amount in order to get some extra income, in order to use this for house hold expense, this is my hard earned money.
L.veeraraghavan
9840135915

murlidar

2 years ago

MCA has appointed provisional liquidator for Micro Technologies and with that all responsibilities of management to return fd holders money seems to have ceased. These promoters have cleverly emptied the companies coffers and left the company to liquidators. The management should be held personally responsible and made to pay the fd holders.

Vaibhav Dhoka

2 years ago

Execution of order is need of hour in INDIA in any arena,as failure of execution has increased cheating many times as there remains no fear of law.This is true in judicial cases too.In short EXECUTION of order is naghtmare in India.

SUNIL KUMAR HEMNANI

2 years ago

A good article from a retail investors perspective .People wrongly get into companies and just suffer . Better to be safe than sorry . Getting a return on investment is good but having a capital is far more important . Thanks Moneylife for warning so many of us of some of the pit falls awaiting investors

Vaibhav Dhoka

2 years ago

Companies come out with new tricks and praposition to fool investors for example Neesa Liesure Ltd which issued advance cheques for maturity and interest to see that cheques are returned unpaid with bank leving cheque return charges.And all law enforsing agencies are burden on state exchequr in turn on public.ROC,mca 21 economic affence wing of concered jurisdiction and SFIO are of no help.So public should think twice before investment.

REPLY

Dayananda Kamath k

In Reply to Vaibhav Dhoka 2 years ago

it should be other way round people should make these authorities function for public good.By gheraoing the member of parliament and member of legislative assembly to look into the matter then only they will start functioning for public good.i have filed a complaint with cheif justice of india regarding how every authority has failed in their duty, long back.

Dayananda Kamath k

In Reply to Vaibhav Dhoka 2 years ago

it should be other way round people should make these authorities function for public good.By gheraoing the member of parliament and member of legislative assembly to look into the matter then only they will start functioning for public good.i have filed a complaint with cheif justice of india regarding how every authority has failed in their duty, long back.

ajaynetmail

2 years ago

Ajay
Leave alone the private company...how about Sardar Sarovar Narmada Nigam Ltd. which failed to deliver promised money to its deposit holders..if anybody has got full..plz enligthen about present status..

REPLY

Dayananda Kamath k

In Reply to ajaynetmail 2 years ago

i think there was put and call options in the scheme and the company exercised the options. idbi also did the same thing earlier. in their investors meet i raised the doubts as to their exercising the option, at that they avoided a clear reply and did the same thing. unless you understand the scheme properly there is every chance for feeling being cheated.

Dayananda Kamath k

2 years ago

as long as it is manned by secretaries who can not read and understand the communication received, what improvement you can expect. a complaint with caption a satyam in corporation bank is interprated as claim from investor protection fund. and even after clarifying he had the audacity to send the same reply with different reference number. what you can expect from mca. all the three ministers salman khurhid, veerappa moily and sachin piolot were informed but no action. hope the present minister will look into it.

Dayananda Kamath k

2 years ago

debenture trusteeship is also a big scam. i as an internal auditor of a nationalised bank had an opportunity to verify the same. the bank charged token fees to act as debenture trustee which is not enough even to cover the cost of holding a meeting of debentrue holders forget about legal costs for ensuring their right. and no clause to recover out of pocket expenses in the agreement. the agreement approved by legal department did not had the mandatory clauses prescribed by sebi. and funniest part is when i discussed it with legal officer who approved he was surprised that sebi has issued guidelines for such things and there are mandatory clauses. so to get other business involved in issue they are compromising the interest of debeture holders. surprisingly no action was initiated on the report. subsiquently i was not given such assignments.

u k saluja

2 years ago

Thanks for writing a timely article on "Can MCA fix those deposit takers". A reference to the orders passed by CLB Mumbai would reveal that many mumbai based companies like Micro Technologies, AVON Corporation Limited having been taking small investors for a ride by promising attractive rates of interest and thereafter not paying back their money on the committed dates. AVON was extending validity of FDs on their own from one year to five years without seeking consent of the investor. Now these companies have gone into liquidation and the investors are now required to submit petitions to MCA/CLB (SEBI does not intervene) for which status given is either "closed" or "work in progress" for months. People at the helm of affairs in MCA must intervene and help small investors especially senior citizens on priority and save them from such unprincipled managements. Thanks.

Sucheta Dalal

2 years ago

At Moneylife Foundation we strongly advise people not to go for fixed deposits other than those of AAA rated companies. Then too we tell them keep a watch.

We also point out that companies who offer 3% more than Bank FDs or 2% more and gifts are desperate and dangerous. Do not listen to agents who tell you otherwise.

But people don't listen. If you are from mumbai do attend our FREE financial literacy seminars. we do not promote any product or service.

Or just watch the videos at http://foundation.moneylife.in under EVENTS

REPLY

Prashant

In Reply to Sucheta Dalal 2 years ago

Is there any possibility of getting the amount back from Helios and Matheson. I have written to MCA but there is no reply. Is there anything further we can do?

Dayananda Kamath k

In Reply to Prashant 2 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

Dayananda Kamath k

In Reply to Prashant 2 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

Dayananda Kamath k

In Reply to Prashant 2 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

Dayananda Kamath k

In Reply to Prashant 2 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

Dayananda Kamath k

In Reply to Prashant 2 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

Dayananda Kamath k

In Reply to Prashant 2 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

veeraraghavan

In Reply to Prashant 2 years ago

i have submitted the bounced cheque, to office of helios and matheson for new cheque, have u submitted, please tell me on further feedback

ss makhni

2 years ago

Fail to understand why Brokers like Bajaj Capital reccomended Micro Technologies for fixed deposits without any proper research, and then delayed any action for one year to initiate any company law board proceedings. There is very little possibility of recovering principal and interest.

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