SFIO's fraud detection system to be operational this month

Fraud detection model would help SFIO to detect wrongdoings in initial stage itself

A fraud detection model to spot corporate wrongdoings right at the initial stages is expected to become operational later this month at the Serious Fraud Investigation Office.

SFIO began working on an Early Warning System after the high-profile Satyam scam came to light in early 2009 and a strong fraud detection model has been developed after numerous tests for its effectiveness and robustness.

Once in place, the fraud detection model would help the agency to detect wrongdoings in the initial stage itself.

"I think by end-September it (fraud prediction model will be operational. An exercise is being conducted (in this regard) and whatever is required is being put in place.

"We are just looking to press the button," Corporate Affairs Minister Sachin Pilot told PTI.

SFIO, which comes under the Corporate Affairs Ministry, is mandated to investigate white collar crimes and is probing various high profile cases including the infamous Saradha scam in West Bengal.

It recently concluded investigations into the Reebok scam and the report has been submitted to the ministry.

A multi-disciplinary organisation, SFIO has the powers to recommend prosecution in white collar crimes.

SFIO is also in the process of setting up a forensic audit laboratory, while it is also revamping its Market Research & Analysis Unit to enable it to function as an intelligence unit.

Forensic audit is primarily used in cases of financial frauds to make a more accurate analysis of facts and figures.

SFIO is currently probing over 60 companies for allegedly duping lakhs of investors through fraudulent investment schemes.