Companies Act Section 219 — Power of inspector to conduct investigation into affairs of related companies, etc
CHAPTER XIV INSPECTION, INQUIRY AND INVESTIGATION
Commercial / Corporate
Summary
An inspector appointed to investigate a company's affairs under sections 210, 212, or 213 can also investigate the affairs of other related entities if they consider it necessary for the main investigation. This is subject to prior approval from the Central Government.
Under clause (a), the inspector may investigate any other body corporate that is, or was at any relevant time, the company's subsidiary, its holding company, or a subsidiary of its holding company.
Under clause (b), the inspector may investigate any other body corporate that is, or was at any relevant time, managed by a person who is, or was at the relevant time, the managing director or manager of the company being investigated.
Under clause (c), the inspector may investigate any other body corporate whose Board of Directors includes nominees of the company, or whose board is accustomed to act according to the directions or instructions of the company or any of its directors.
Under clause (d), the inspector may investigate any person who is, or has at any relevant time been, the company's managing director, manager, or employee.
In all these cases, the inspector must first obtain the Central Government's approval. The inspector then investigates and reports on the affairs of the other body corporate or person, but only to the extent they consider the results relevant to the investigation of the company for which they were originally appointed.
Official Text
If an inspector appointed under section 210 or section 212 or section 213 to investigate into the affairs of a company considers it necessary for the purposes of the investigation, to investigate also the affairs of—
(a) any other body corporate which is, or has at any relevant time been the company’s subsidiary company or holding company, or a subsidiary company of its holding company;
(b) any other body corporate which is, or has at any relevant time been managed by any person as managing director or as manager, who is, or was, at the relevant time, the managing director or the manager of the company;
(c) any other body corporate whose Board of Directors comprises nominees of the company or is accustomed to act in accordance with the directions or instructions of the company or any of its directors; or
(d) any person who is or has at any relevant time been the company’s managing director or manager or employee, he shall, subject to the prior approval of the Central Government, investigate into and report on the affairs of the other body corporate or of the managing director or manager, in so far as he considers that the results of his investigation are relevant to the investigation of the affairs of the company for which he is appointed.