Protection To Whistleblowers Under Indian Corporate Law
- IJLLR Journal
- Jul 22, 2023
- 1 min read
Yatanti Singhal, BBA LLB, Symbiosis Law School, Noida
ABSTRACT
The Constitution of India, 1950 provides whistleblowers with the first level of protection, ensuring the freedom to send and receive information under Article 19(1)(a). The State has a duty to establish conditions and frameworks to ensure effective exercise of this right. Article 21 guarantees personal liberty and the right to life, including the freedom to hold an opinion.
The Companies Act, 2013 requires listed corporations to create a "vigil mechanism" to address whistleblower concerns, including discrimination, willful negligence, misappropriation of funds, and audit reports. This mechanism must have a structure for ranking positions, zero tolerance for pressure, privacy protection, and punitive measures against untrue claims or misleading rumors.
The Serious Fraud Investigation Office (SFIO) was established to investigate fraud-related crimes. The Ranbaxy company fraud, brought to light by a whistleblower named Dinesh Thakur, exposed the company's illegal activities. The SEBI Regulations, including the Companies (Auditor's Report) Order, 2020, and the Whistleblower Protection Act, 2014, aim to protect whistleblowers from retaliation from powerful individuals engaging in unethical actions.
The Act grants seven years from the date of the fraud or scam to report it, with fines for negligent or malicious disclosures and fines for incorrect or misleading declarations. The practical execution of these rules is a major concern, as the Companies Act does not have a mechanism for companies to follow when faced with such scenarios.
Comments