With statutory backing, SFIO has more teeth to check frauds

Despite the rising cases of financial scams, the number of cases referred to the SFIO for investigation has actually seen a dip last year — from 83 in 2013-14 to 52 in 2014-15.

Government has given more teeth to the Serious Fraud Investigation Office (SFIO) under the corporate affairs ministry by giving it statutory backing that is expected to help the agency check company frauds better. The government has taken various measures to strengthen SFIO to check fraud and irregularities by companies and the office has been given a statutory status, Minister of State for Finance Arjun Ram Meghwal said in a written reply in Lok Sabha on Friday.

The minister also informed the Lower House that the term “fraud” has been defined in the Companies Act, 2013, and there is now an increased application of technology for early detection of frauds through data mining and forensic audit. “Further, during the last three years and in the current year, SFIO has filed 258 prosecutions in various courts. In this period, 163 number of cases have been disposed of by the courts, of which there has been successful conviction in 77 cases wherein punishment including imprisonment to directors as well as of fines have been imposed,” the said.

As many as 52 cases have been referred to SFIO till October 31 in the current financial year. In the previous three fiscals, a total of 338 such cases were referred to the investigative arm of the corporate affairs ministry, Meghwal said in the house. In reply to a separate question on details of economic offences registered by the Enforcement Directorate under the finance ministry, the government said 2,585 show-cause notices have been issued imposing fines of Rs 232.26 crore under FEMA in the last three years and current year up to October 31.

“As regards preventive action against the offenders during the mentioned period, it is stated that the value of assets worth Rs 13,801 crore have been attached, 241 prosecution complaints have been filed and 67 persons have been arrested under the Prevention of Money Laundering Act (PMLA),” Minister of State for Finance Santosh Kumar Gangwar said.