As Mr. Umakanth discussed in this post, the Supreme Court of India in Iridium India Telecom v. Motorola Inc. (Criminal Appeal No. 688 of 2005, judgment dated October 20, 2010) has confirmed that companies can be prosecuted for offences involving mens rea. The Court in Iridium appears to have approved of the theory through which the intention of the directing mind and will of a company is...
Corporate Criminal Liability: The Iridium/Motorola Case
The judgment of the Supreme Court in Iridium India Telecom Ltd. v. Motorola Inc. is now available on JUDIS (date: 20 October 2010). M.J. Antony has a summary and analysis of the case in the Business Standard: The question of punishing a corporation came up recently in the Supreme Court in a criminal case filed by Iridium India Telecom Ltd against Motorola Incorporated. The allegations were...
Should Shareholders Pay for Corporate Misconduct?
The U.S. SEC’s settlement last week with Citigroup has revived the debate about the efficacy of payments by way of settlements, fines and penalties by companies as a consequence of breaches of law. Under this settlement, Citigroup is required to pay $75 million for making “misleading statements about the extent of its holdings of assets backed by sub-prime mortgages in earnings calls and public...
The Social Cost of Corporations
Recent events, both in India and elsewhere, have thrown the spotlight on the roles and responsibilities of companies in society. In an interesting article “The Conscience of Capitalism” in Forbes India, Arun Maira discusses (in a non-technical fashion) the difficulties in pinning responsibility for wrongdoing by a company. Pertinently, he notes that while the “limited liability corporation is an...
Bhopal Gas Disaster Case
The Law and Other Things Blog links to Frontline’s extensive coverage of the judgment rendered last week by the Chief Judicial Magistrate in Bhopal. It also provides a detailed account of the twists and turns encountered by various parties to the litigation for the last 25 years.
Director and Officer Liability for Dishonour of Cheques
(The following post has been contributed by Avirup Bose. Avirup is an Indian lawyer, who has graduated from NUJS Kolkata and has an LL.M from the Harvard Law School) On July 6, a Division Bench of the Supreme Court passed a judgment in K.K. Ahuja v. V.K. Vora (MANU/SC/1111/2009, per R.V. Raveendran, J.) (“K.K. Ahuja”), where it considered the particular question as to who can be said to be...
SFIO: Its Role and Track Record
Although the Serious Fraud Investigation Office (SFIO), set up under the Ministry of Corporate Affairs, has been in existence for over 5 years now, its role has been accentuated owing to the recent turn of events at Satyam Computers. The SFIO has been charged with the task of investigating the fraud at Satyam within a period of three months. In his article in the latest issue of Frontline, V...
Sentences in China’s Sanlu Milk Case
Speaking of corporate crimes, this news report in Caijing states that death sentences have been awarded by an Intermediate Court to three persons and life imprisonment for one in the contaminated milk case. This comes within mere 4 months of the scandal that unfolded in September last year. While criminal punishment will certainly serve as a deterrent, questions have been raised at the...
Legal and Economic Fallout of Mumbai Attacks
The key question being posed in legal and financial circles relates to the extent of insurance coverage for loss caused by terror attacks, and also the related liability of various state and private actors involved. In a column in Rediff Money, Kumkum Sen highlights possible issues on liabilities, both civil and criminal. As the columnist notes, the chances of successfully bringing about any...
When Can Directors be Held Responsible for Offences Committed by Their Companies?
(The following post contributed by Gautam Bhatia, a III Year B.A., LL.B (Hons.) student at the National Law School of India University, Bangalore deals with an important, but often controversial, issue of whether directors should be held criminally liable for offences by companies) The case of Maksud Saiyed v. State of Gujarat, decided by a two judge bench of the Supreme Court in September 2007...
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