New Delhi: Government might empower Company Law Board to order "unconditional" attachment of properties of defaulting non-banking finance companies (NBFCs) in a bid to ensure investor protection against vanishing companies.

This was disclosed in the Action Taken Report (ATR) on the findings of Joint Parliamentary Committee, which went into the stock scam of 2002.

"A provision has been made in the Financial Companies Regulation Bill, 2000 (at present under the consideration of the Parliamentary Standing Committee of Finance) empowering the CLB to issue orders of unconditional attachment of whole or any portion of the assets of the NBFC, as specified by the aggrieved depositor," the report said.

With this move, the ATR said the CLB would have powers to appoint a receiver for recovering the unpaid deposit from the defaulting NBFC.

In case of disobedience, the CLB may order the attachment of properties and assets of the guilty.

JPC had wanted Securities and Exchange Board of India (SEBI), Department of Company Affairs, CLB and Reserve Bank of India (RBI) to work "seriously" towards ensuring that investors get their money back, and take "all necessary steps, including attachment of properties and assets of directors of vanishing companies".

To JPC's suggestion of extending the insurance coverage from Deposit Insurance and Credit Guarantee Corporation to the depositors of NBFCs as well, the ATR said the Centre proposed to introduce a Bill on Bank Deposit Insurance.

Such an insurance cover was there for depositors of co-operative banks, JPC had noted.

PTI