Govt may allow NFRA to split its functions

The government is considering a division of functions within the National Financial Reporting Authority (NFRA), and may allow the regulator to bifurcate its functions of review of an audit and the disciplinary proceedings to be taken thereafter, according to official sources.

- RUCHIKA CHITRAVANSHI

Currently, the NFRA executive body is entitled to discharge all functions and duties assigned to the authority as a whole.

The Ministry of Corporate Affairs, the nodal ministry for NFRA, would have to enable the regulator to delegate its investigation or review function to its officials outside of the executive board by amending the Companies Act, the sources said.

The Delhi High Court, in an order earlier this year, had said that the absence of a bifurcation of functions exposes NFRA to allegations of bias, a tendency to dismiss challenges to preformed opinions, and disregard for arguments aimed at review and reappraisal.