SFIO completed probe in 55 cases in last 3 years

The Serious Fraud Investigation Office (SFIO), which is under the Corporate Affairs Ministry, completed probes in 55 cases in the last three years.

As many as 64 cases were referred to SFIO, which has powers to probe serious fraud cases committed by corporates, in the last three financial years.

"During the last three years (2010-11, 2011-12 and 2012-13), 64 cases were referred to SFIO (Serious Fraud Investigation Agency)...," Corporate Affairs Minister Sachin Pilot informed the Lok Sabha in a written reply.

"During this period, investigations have been completed in 55 cases," he added.

As per a list provided by Pilot, some of the companies against which probe has been completed in the last three years include Sesa Goa, Sesa Goa Industries, Ambuja Cements, Ultratech Cement and DSS Mobile Communications.

SFIO probe is under progress against companies including Reebok India, Speakasiaonline and Vaishnavi Corporate Communications.

According to the Minister, of the 55 cases in which probe was ordered by the Ministry, 26 were referred on the basis of directions of various high courts for investigations.

On the action taken after completion of the probes, he said "in most of the cases referred by high courts, specific issues were referred for investigation and action taken was limited to filing of investigation report to the court".

"It is the prerogative of the high courts to take action on the investigation reports. However, the Ministry also issues instructions on the findings in these reports if there are violations of law," he added.

The Minister also informed the house that in 20 cases, 79 complaints have been filed under the Companies Act and six have been registered inder the Indian Penal Code.

On question about granting "statutory status" to SFIO, Pilot said that the government has proposed the same and has incorporated enabling provisions in the Companies Bill, 2012.

Besides, he said the government has included some other provisions relating to the functioning of SFIO in the bill.

These include defining "fraud" and making it cognizable, the investigation report of SFIO to be treated at par with investigation report filed in the court by a police officer under criminal procedure code, powers of arrest for certain offences and a coordination mechanism between SFIO and other investigation agencies which are statutorily recognised.

To a query about an early warning system to detect fraud, Pilot said that his ministry is actively considering developing a "Fraud Prediction Model" in this regard.

"A high-powered steering committee has been set up with technical experts in various fields to design a comprehensive framework for a fraud prediction model. The terms of reference include drawing up of a detailed plan for implementation, including timeline for testing a pilot," the Minister said.

He added that the committee has submitted its draft report to SFIO and the pilot testing of the model is expected in the current financial year (2013-14).