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CS Professional · Internal and Forensic Audit · Audit and Investigations

During an investigation into Sagar Infra Ltd, an inspector appointed under the Companies Act, 2013 asks a former director to produce books and papers and to give evidence. The director declines, arguing that the inquiry is only administrative. What is the correct legal position?

A former director is still bound to produce documents and assist the investigation, because the Act extends this duty to officers and agents of the company, past and present. Refusal is punishable. The inspector can examine persons on oath, so the director's argument fails.

  1. AThe director may refuse because the inspector has no power to examine persons on oath
  2. BOfficers and agents of the company, including those formerly holding such positions, are bound to produce documents and assist the investigation, and refusal attracts penal consequencesCorrect
  3. COnly current directors are bound to cooperate, so a former director is exempt
  4. DCooperation is voluntary until the Tribunal issues a separate summons

Explanation

The Act places a duty on officers and agents of the company, including past ones, to preserve and produce books and papers and to give all assistance to the investigating authority. The inspector may examine persons on oath. Refusal is punishable, so the claim that cooperation is voluntary or limited to current directors is incorrect.

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