(12.13.7) Investigation of ownership of a company

The Central Government, if satisfied that there is a good reason, may appoint one or more inspectors to investigate and report on the membership of any companies, for the purpose of determining who are the persons financially interested in its success or failure or are able to control its policy. The inspector may also investigate (with the prior approval of the Central Government) the ownership of other connected companies such as subsidiary companies, holding companies. On completion of his investigation, the inspector is required to submit his report to the Central government, but the latter is under no obligation to supply copies of the inspector’s report to the company or any other person, if it is of the opinion that there is no good reason for not divulging the contents of the report or parts thereof (s.247). Similarly, wherever it appears to the Central Government or the Company Law Board that there is good reason so to do, it may appoint on or more inspectors to investigate the ownership of shares and debentures of a company (s.248). Further, s.250 provides that in a case where, owing to a change in the ownership of shares, a change in the directors of a company is likely to take place, which, if permitted would, in the opinion of the Central Government, be prejudicial to the public interest, then the government may direct that for a specified period voting rights shall not be exercised by the transferees of those shares.