A director’s liability in cases of fraud4 min read . Updated: 29 Mar 2018, 07:11 AM IST
Given that investor directors are usually non-executive in nature, they should normally not be liable for actions which are largely promoter-driven
In the past few weeks, the Central Bureau of Investigation (CBI) has registered cases against multiple companies and their officials for bank frauds, such as Gitanjali Gems and Simbhaoli Sugars. Coupled with such revelations is the response of the government, which has brought the investigative authorities out of their usual stupor. The government has now asked public sector banks to evaluate potential frauds in all bad loans above Rs50 crore. Thus, over the next few weeks, we will see increased scrutiny by banks, and, in turn, by authorities such as the CBI, Enforcement Directorate (ED) and Serious Fraud Investigation Office (SFIO).