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Richa Mishra

New Delhi , Sept. 2

The Ministry of Company Affairs has ordered inspections into accounts of certain companies in the Escorts group.

The group was in the news recently due to the differences between the Nanda brothers — Mr Rajan Nanda, Chairman of Escorts Ltd, and the younger Mr Anil Nanda. Besides, the Income-Tax department is reported to have initiated penal proceedings against Escorts Ltd for avoiding tax.

The Ministry of Company Affairs swung into action recently. The sources, however, refrained from disclosing the exact nature of the complaint. The Ministry has directed its Registrar of Companies (RoC) office to initiate inspections under Section 209 A of the Companies Act.

Section 209 A empowers the Union Government for inspection of books of accounts and other documents of a company. The Section provides that any person making an inspection under this Section shall have the same powers as are vested in a civil court, while trying a suit.

After the inspection a report is to be submitted to the Union Government. The company's trial with controversy started exactly a year back, with the issue of conversion of Escorts Heart Institute and Research Centre (EHIRC), originally started as a charitable trust, into a company creating a rift between the two brothers. In fact, a survey was conducted by the Income-Tax Department at the offices of Escorts Ltd, including EHIRC.

The Indian Investors' Protection Council had also then submitted a letter of dissent to Escorts Ltd questioning the manner in which the conversion of EHIRC was carried out. According to sources, "the inspection ordered by the Ministry is going to examine more than just this issue."

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