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Wednesday, Dec 10, 2003

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Independent investigator submits report on Flex Ind

Richa Mishra

New Delhi , Dec. 9

THE independent investigator appointed by the Department of Company Affairs for probing the charges against Flex Industries for violations under Companies Act has submitted its report to the Government today.

This is one of the two cases for which the Department had outsourced an investigator following criticisms on quality of its investigations.

Sources told Business Line, "The independent investigator has submitted their report to the Department." Refraining from divulging any information on the outcome of the report, sources said, "The report will now be examined by the Department and any course of action will be based on DCA's findings."

Close on the heels of outsourcing an independent investigator for Xerox Modicorp, the Department had appointed the Delhi-based audit firm, T R Chadha & Co, last year, to probe charges against Flex Industries. The investigators had sought extension of time in June this year to complete investigations.

The charges against the company included allegations of diversion and mismanagement of funds. It may be recalled that the Central Bureau of Investigation had arrested the Chairman and Managing Director of Flex Industries, Mr Ashok Chaturvedi, for allegedly paying Rs 5 lakh as bribe to the Chief Commissioner of Central Excise (Delhi Zone), Mr Someshwar Mishra, in November 2001. Flex Industries, with a turnover of Rs 700 crore and an asset base of Rs 850 crore, is engaged in flexible packaging.

Before appointing the independent investigator, the Department had been conducting its own probe against the company and after examining the report of the Registrar of Companies (RoC), it had initiated the move to appoint an investigator. It had taken the initiative under Section 237 of the Companies Act, 1956. The section provides for investigation of company's affairs in other cases. It also stipulates that the Union Government to appoint one or more competent persons as inspectors to investigate the affairs of a company.

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