SFIO detects siphoned funds worth Rs 5,607 cr in last 3 years

Probes by SFIO, the investigation agency for serious corporate frauds, has found siphoning of funds worth Rs 5,607 crore at 18 companies in the past three years, Corporate Affairs Minister Sachin Pilot said today.

Assuring necessary steps to keep corporate frauds in check, the Minister also said the existing Market Research and Analysis Unit of the Serious Fraud Investigation Office (SFIO) is being revamped and a pilot testing of the new unit would be carried out in the next fiscal.

"From 2009-10 to 2011-12 till the current financial year, SFIO has completed investigations in 63 cases. In these investigations, siphoning of funds amounting to Rs 5,607.37 crore involving 18 companies has been detected," Pilot informed the Lok Sabha in a written reply.

To a query about setting up of a new intelligence unit to detect corporate frauds, Pilot said: "It is proposed to revamp the existing Market Research & Analysis Unit (MRAU) in the SFIO to enable it to function as an intelligence unit".

"A Committee has been constituted by the Ministry for the purpose of revamping MRAU. The report of the Committee is expected to be submitted shortly," he said.

The Minister said pilot-testing of the proposed unit is expected during the financial year 2013-14.

To another query on number of frauds cases settled by SFIO, Pilot said "it is not within the purview of SFIO to settle cases as they are authorised to file complaints in the jurisdictional courts".

"It is the continuous endeavour of the Ministry to upgrade skills, systems and knowledge through improved coordination mechanisms with other investigating agencies for maintaining a check against recurrence of corporate frauds," he added.

To a separate question, Pilot informed the house that 42 cases have been referred to SFIO in the current financial year of which the agency has completed probe in 15 cases.

Besides, 24 cases have been referred to SFIO, during the period from April 1, 2009 to March 31, 2012. Of these, probes have been completed in 23 cases.

"During the financial years 2009-10, 2010-11 and 2011-12, out of the 23 completed cases, 10 cases were referred by the High Courts while 13 were referred by the Ministry," Pilot said.

In response to a query on the number of companies prosecuted during the last three years, he said 30 "prosecutions were filed under various provisions of the Companies Act, 1956" and "12 prosecutions under the provisions of Indian Penal Code (IPC) in various courts".