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CS Professional · Internal and Forensic Audit · Audit and Investigations

An SFIO investigating officer arrests a person during an investigation under the Companies Act, 2013. Which safeguard must be followed?

An arrested person must be told the grounds of arrest and be produced before the Special Court or a judicial magistrate within twenty-four hours, excluding travel time. The Act provides no seven-day detention, and no ratification by the company's board is needed.

  1. ANo safeguard is required because the arrest is part of the inquiry
  2. BThe person must be informed of the grounds of arrest and produced before the Special Court or magistrate within twenty-four hours, excluding travel timeCorrect
  3. CThe person may be detained for seven days before being produced anywhere
  4. DThe arrest becomes valid only after the company's board ratifies it

Explanation

The Act permits arrest by the authorised SFIO officer only where there is reason to believe the person is guilty of a specified offence, and requires the grounds to be communicated. The arrested person must be taken before the Special Court or judicial magistrate within twenty-four hours, excluding journey time. A seven-day detention or board ratification has no basis in the Act.

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