Sanctioned prosecution in 366 cases related to CSR norms violations: FM

Prosecution proceedings have been sanctioned in 366 cases related to violation of CSR provisions under the companies law, the government said on Monday.

Under the Companies Act, 2013, certain class of profitable entities is required to shell out at least two per cent of their three-year average annual net profit towards CSR (Corporate Social Responsibility) activities.

As part of amendments to the Act, non-compliance with CSR provisions has been made “civil wrong” with effect from January 22, 2021.

Whenever any violation of CSR provisions is reported, action against such non-compliant companies are initiated as per provisions of the Act after due examination of records and following due process of law. All CSR related defaults are compoundable.

So far, sanction for prosecution has been accorded in 366 cases. Of these, 148 applications for compounding have been made and 75 cases have been compounded, Nirmala Sitharaman, who is in charge of corporate affairs and finance ministries, told Lok Sabha on Monday.

Generally, compoundable offences are those which can be settled by paying a certain amount of money.

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