- List of Changes made in SEBI after the Sahara Scam-:

- Before the Sahara Scam, the term “private placement” had not been defined in the Companies
Act. Only those instances where an offer would not qualify as a “public offer” had been defined.
On SEBI’s recommendation, S.42 was introduced in the Companies (Amendment) Act, 2013. It
defined private placement “as any issue of securities by a listed or an unlisted public company to
49 or less people where individual invitations to buy are sent to the investors.” As soon as the
number of investors rose to 50 and beyond, the issue of shares would be declared a public offer
and would have to be verified and approved by the SEBI.

- The government gave SEBI the power to regulate any money pooling worth Rs.100 crores or
more.

- The government has given SEBI the authority to cease the assets of the people who do not
comply with the “seize and search” orders issued by the SEBI Chairman.

- The government has instructed SEBI to create a new law to control illicit investment schemes.
SEBI is in the process of drafting this law and sending it to the required authorities for approval.

- SEBI now has the right to retrieve and investigate the telephone records, etc. with respect to
any securities investigation.

- For the primary market reforms, SEBI has made a Standard Operating Procedure for
suspension and revocation of trading of shares in listed entities for non-compliance with listing.

- -SEBI took many initiatives to strengthen the framework for investor grievance redressal.
"For example, earlier the Redressal for grievance between broker and a client used to take place
at 4 centers in the country. This has been extended to 16 centers. "The grievance redressal
panel also earlier used to be predominantly made of brokers and in many cases, it was 100
percent dominated by brokers. Now, SEBI have ensured that the panel is neutral from a broker
driven panel, SEBI have made it a neutral panel.

- Chit funds, Nidhi schemes and housing schemes (collective investment schemes) that are not
regulated by any particular authority and have a corpus greater than Rs.100 crores have to be regulated
by SEBI and follow all regulations as deemed fit by SEBI

- "The computerized grievance redressal system SCORES has also seen many improvements.
Recently, SEBI came out with an advisory on SCORES. Then, SEBI have created Their own call
center, where any complaint can be lodged at any time. This call center is working in 14
languages.
 - SEBI passed an interim order against such companies that restrained them from raising funds,
dividends and bonus share and barred them from transactions.

- As per the new norms, The public servants and persons holding statutory positions was
prohibited from trading in listed securities of companies whose matters are being handled by
them as it gives them access to non-public price sensitive information.

- RECENT CHANGES MADE IN MONEY LAUNDERING ACT 2019.

- Money laundering will be treated as a standalone crime.
- The Deletion of provision in section 17 [search and seizure] and section 18 [search of persons]
which is required for the existence of an FIR or charge sheet by other the agencies that are
authorized to approve the offenses listed in the PMLA schedule.

- The section 44, under which the schedule offense trial will not be treated as joint trial with
PMLA offence.

- Section 45 clarifies that all PMLA offences will be cognizable and non bailable.

- Section 72 now includes a part which gives power to center to set up inter-ministerial
coordination committee for interdepartmental coordination.

- 2. Financial intelligence unit [FIU]- Conducts analyses of information received under PMLA and
also disseminate same to various relevant agencies.
- Under section 12 , it requires financial sector entities to verify identity and large transaction of
clients and disseminates same to FIU.
-
- We needed foreign exchange management act 1999 [FEMA]-

- It Provides for legal framework for the administration of foreign exchange transactions.
-
- The Cases related to contravention in foreign exchange can be adjudicated under it.
-
- International efforts-
-
- Vienna Convention- for corporation, extradition and criminalizing money from drug trafficking.
- 2. The financial action task force [FATF]- an initiative of G7 or G20 to develop policies to combat
money laundering and terror financing.

- 3. basil committee statement of principle- seeks to deny banking to those involved in money
laundering.
-
- 4.Mutual legal assistance treaty

- Investors are the backbone of the securities market, and they play a vital role in the activity of
stock market along with enhancing the level of activity in the economy. Earlier the Companies
Act 1956, was unable to assure the investors interest and overcome corporate crime. The
Satyam and Sahara scam fallout was one of the important failures of the Companies Act 1956
regarding investors protection. Thus, the incident increases the debates to reform the corporate
structure, that is the corporate system and processes need to be credible and transparent so
that the interests of the investors may be a safeguard in a manner to make an independent or
save decision. Therefore, this particular fall out of the corporate governance significantly focuses
on Companies Act 2013 on establishing adequate investor protection measures. This act was
equipped with or embedded with the new provision and regulation for ensuring transparency
and accountability in companies management and for safeguarding investors interest. The
Companies Act 2013 was enacted with the main aim to attract or enhancing penalties for
breaches and non-compliance.

- Regulations regarding investors protection under Companies Act, 2013

- Acceptance of deposits- the acceptance of deposit from the general public is not permitted
under the ACT, and violation of any of the provision is a punishable offense. Section 73 of the act
provides that no company shall accept or review deposit under this act from the public except in
a matter recognized under chapter five of the act and companies [acceptance of deposit] rule
2014.
- Misstatement in prospector's- the prospector's is a written statement issued by the company to
the general public containing brief information regarding companies' profile in their investment
proposals. Section 34 of the act deals with the criminal liability for misstatement in the
prospectus issued by a company. The prospectus issued, circulated or distributed, include any
statement, which is untrue or misleading in form of context to induce people to make an
investment, shall be liable for action under section 447.
- fraudulently inducing person to invest money- section 36 of the act deals with the punishment
of the person who intentionally or recklessly induces the investor to make the investment
 through any agreement for the purpose or to pretended purpose of which to secure a profit.
This kind of deliberate concealment of fact shall be liable for punishment under section 447.
-
- Non-payment of dividend- declaration of the dividend is usually one of the items of agenda of
every Annual General Meeting. The dividend is nothing but profits earned by the company and
divided among shareholders in proportion to the amount paid up shares held by them that is
return on the investment made by shareholders. The section 125 of the act provides for the
establishment of investor education and protection of fund by the central government. This
fund is credited with the unpaid or unclaimed amount of application money or matured money
or matured deposits. Such accumulations of the fund are to be utilized for promotion of
investor’s awareness and protection of investor interest. Section 123 of the ACT state that the
dividend should be created in investors account within five days after the declaration.
-
- right to demand financial statements- section 136 of the act to provide for the right of a
member to obtain copies of balance sheet and auditors report. in the case of default complying
with this requirement, the company shall be liable for a penalty of ₹25,000 and the authorized
officer who is in default shall be liable for a penalty of ₹5000. Besides, this investor has the
option to proceed against the company or its authorities in a court of law under the guidelines
determined under section 436 of the ACT.