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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Business Ethics, Code of Conduct and Anti-Bribery

Meridian Pharma Ltd, a company incorporated outside India, runs a sales office and part of its business in Pune. Its Pune distributor promises a gift to a government hospital official to retain a supply contract. Is Meridian a 'commercial organisation' for Section 9 of the Prevention of Corruption Act, 1988?

Yes. The Act defines a commercial organisation to include a body incorporated outside India that carries on a business or part of a business anywhere in India. Meridian's Pune operations bring it within the definition, so its anti-bribery code must address associated persons such as distributors.

  1. ANo, only bodies incorporated in India qualify
  2. BNo, because the distributor is not a subsidiary
  3. CYes, a body incorporated outside India that carries on a business or part of a business in India is coveredCorrect
  4. DYes, but only if it has a registered office in India

Explanation

The definition includes any body incorporated outside India which carries on a business, or part of a business, in any part of India. Hence Meridian is covered. Limiting it to Indian-incorporated bodies ignores clause (ii) of the definition.

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