Fugitive offenders will face the heat

It is heartening that the Union Cabinet has cleared the introduction of the Fugitive Economic Offenders Bill to deal with economic offenders who flee the country to avoid prosecution. That the Narendra Modi government proposes to bring a law that classifies such offenders as fugitives and empowers the governmental authorities to confiscate their assets in India and abroad is worthy of commendation and reflects a realisation that there needs to be a strong deterrent for the likes of Nirav Modi, Mehul Choksi and Vijay Mallya. These industry bigwigs fled the country before the law caught up with them making a mockery of the Modi government’s watchdog mechanism. Though the proof of the pudding must lie in its eating, one cannot but give due credit to the government for displaying a sincerity of purpose. The proposed Bill will also come down hard on chartered accountants and will strip the Institute of Chartered Accountants of India of powers to initiate disciplinary action against CAs and audit firms dealing with listed companies, large unlisted companies and specific beneficiaries. It comes out time and again when there are major financial scams that some CAs act a fillip to malpractices. That under the new proposed law, these powers will be vested in a new authority — the National Financial Reporting Authority (NFRA) — could well be a step forward in injecting a measure of accountability for recalcitrant CAs at a time when it has become commonplace for the accountants to window-dress and put a shroud over the misdeeds of economic offenders. It goes without saying, however, that a mere change in authority will not be enough. A close watch would need to be kept on the new authority to ensure that it does its business sincerely and judiciously. Punitive action against violators would be the key.

Finance Minister Arun Jaitley’s assertion that the proposed law will cover anyone avoiding the law, whether old or new, and that the confiscation of assets of the fugitive offender would apply to overseas assets too hold promise that the law would catch up with a fugitive like Vijay Mallya too, though any meaningful action will require the cooperation of the respective foreign governments. There is still much ground to cover and it is to be hoped that the new law would be well-drafted so that economic offenders are not able to find loopholes to their advantage. But, there is no denying that the proposed law bodes well for the country in dealing with fugitives.