(E) INSPECTION AND INVESTIGATION Inspection Section 209A Books of account & other books & papers of every

company shall be open during business hours for inspection which may be made without giving any previous notice by Registrar or an Officer of CG or an Officer of SEBI (Section 55A matters Issue & transfer of Securities and Non-payment of dividend) & furnish him with any statement, information or explanation relating to the affairs of the company. Who can apply for investigation? 1. Section 234 (6) or 234 (7) Where a report has been made by the Registrar (CG may appoint) 2. Section 235 (2) In the case of a company having a share capital, an application by not less than 200 members or from members holding not less than 1/10th of the total voting power therein In the case of a company having no share capital, an application by not less than 1/5th of the members has been received (Tribunal may, after giving the parties an opportunity of being heard, by order, declare that the company ought to be investigated, CG may appoint). The application shall be supported by such evidence to show that the applicants have a good reason for requiring the investigation. CG may, before appointing an inspector, require the applicants to give security, for such amount not exceeding 1000 rupees as it may think fit, for payment of the costs of the investigation. 3. By the company on passing the special resolution or by Court Order, CG may appoint 4. By the Central Government, if there are circumstances suggesting that the Business of the company is being conducted with intend to defraud its creditors, members or any other persons, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive of any of its members; or Persons concerned in the formation or management of its affairs have been guilty of fraud, misfeasance or other misconduct towards the company or any of its members; Members of the company have not been given all the information with respect to its affairs which they might reasonably expect.

Section 238 A firm, body corporate or other association shall not be appointed as an inspector. Power of Inspectors To carry investigation into affairs of related companies (Section 239) The inspector shall investigate the affairs of any other body corporate which is, or has at any relevant time been 1. The companys subsidiary or holding company, or a subsidiary of its holding company, or a holding company of its subsidiary; 2. Managed by any person as MD or as manager, who is, or was, at the relevant time, MD or the manager of the company; 3. Managed by the company or whose BODs comprises of nominees of the company or is accustomed to act in accordance with the directions or instructions of the company, or its directors or any company, whose directorships is held by the employees or nominees of those having the control & management of the first-mentioned company; or 4. Any person who is or has at any relevant time been the companys MD or manager, Production of documents & evidence He may keep in his custody any books & papers for 6 months & then shall return the same. An inspector may examine on oath (1) any of the persons referred to as above (2) with the previous approval of CG, any other person in relation to the company, He may administer an oath accordingly & for that purpose may require any of those persons to appear before him personally. Any reference to officers & other employees, agents or partners shall be construed as a reference to past as well as present officers as the case may be. Section 247 Investigation of Ownership of Company If it appears to the Central Government that there is good reason so to do, it may appoint one or more inspectors to investigate & report on the membership of any company & other matters relating to the company, for the purpose of determining the true persons

(a) Who are or have been financially interested in the success or failure, whether real or apparent, of the company; or (b) Who are or have been able to control or materially to influence the policy of the company. A prosecution shall not be instituted under this section except by, or with the consent of CG This section shall apply in relation to debentures as it applies in relation to shares. Section 250A An investigation may be initiated under section 235, 237, 239 or 247 notwithstanding that (a) An application has been made for an order under Sec 397 (Application by minority shareholder in case of oppression) or Sec 398 (Application by minority in case of mismanagement) (b) The company has passed a special resolution for voluntary winding up, & no investigation so initiated shall be stopped or suspended.