(a) In relation to each type of insolvency procedure available in the legal system of this economy, what powers are given to, or duties imposed upon, each type of administrator to investigate, discover and report to a Court or to regulatory authorities of the government any breaches of the law by former management of the corporate debtor?

 

Winding up- the liquidator is under obligation to make a full report on the state of affairs of the company as also the need for any inquiry as to any matter relating to the company (Sec.329) and for this purpose the liquidator is empowered to seek the return to the Company of any money, property, books or papers to which the Company is prima facie entitled and which are in the possession of any trustee, employee, officer past or present of the Company (Sec.340); to call for an examination of any person and seek from such person any information pertaining to the Company and to report any fraud that has been committed in relation to the affairs of the Company (Secs.351 and 352).

An administrator appointed under Sec.295 has the power to ask any person to produce and deliver to the administrator any property, records or documents relating to the debtor company.

(b) What methods are available to each type of administrator to exercise such powers or discharge such duties? (for example examinations of directors, powers to inspect books and records, obligations to report to government authorities.)

 

The liquidator may apply to the court for summoning any officer of the company suspected of holding property of the company (Sec.351) or may apply to the Court for action against any person who has misapplied or retained or become liable for the property or money of the company or who has been guilty of misfeasance or breach of trust in relation to the company (Sec.412).

The administrator may report to the SECP any failure by any person to supply to the administrator any property, document or record summoned by him or any act of obstruction in the management by him of the affairs of the debtor company. On such a complaint being made the SECP has the power to fine the defaulting person in an amount upto Rs. one million and a further fine of Rs. one thousand per day for each continuing day of default.(Sec.295(9)).