CAG Audit of ‘deemed government companies' - MoCA clarifies
DOUBTS have been raised about applicability of sections 139(5) and 139(7) of the Companies Act, 2013 (New Act), which deal with appointment of auditors by Comptroller and Auditor General of India (C&AG), to 'deemed Government Companies' referred to in section 619E of the Companies Act 1956 (Old Act) i.e. companies where ownership or control lies with two or more Government companies or corporations.
Ministry clarifies that the new Act does not alter the position with regard to audit of such deemed Government Companies through C&AG and thus such companies are covered under sub-section (5) and (7) of section 139 of the new Act.
Clarification has also been sought about the manner in which the information about incorporation of a company subject to audit by an auditor to be appointed by the C&AG is to be communicated to the C&AG for the purpose of appointment of first auditors under section 139(7) of the New Act. It is clarified that such responsibility rests with both, the Government concerned and the relevant company.
To avoid any confusion it is further clarified that it will primarily be the responsibility of the company concerned to intimate to the C&AG about its incorporation along with name, location of registered office, capital structure of such a company immediately on its incorporation.
It is also incumbent on such a company to share such intimation to the relevant Government so that such Government may also send a suitable request to the C&AG.
Where is the Governance in all this Government?
MoCA General Circular No. , Dated: July 31, 2014