Develop early warning system to detect frauds:Par panel to MCA

With the Ministry of Corporate Affairs (MCA) failing to develop a foolproof early warning system to detect frauds, a Parliamentary panel has urged it to put in place a "coherent and efficacious" fraud prediction framework at the earliest.
Taking a dim view, the committee also said that it was "constrained to note the trial and error approach of SFIO in formulating modules/systems for prediction detection and prevention of frauds".
The Serious Fraud Investigation Office (SFIO), which primarily probes white-collar crimes, comes under the MCA.
The observations have been made by the Parliamentary Standing Committee on Finance -- headed by Congress leader Veerappa Moily -- in its report on Demand for Grants (2016-17) of the MCA. It was tabled in the Parliament on April 27.

Four years ago, the Ministry had set up a steering committee for developing an early warning system (EWS) and SFIO was entrusted with the task of establishing a dedicated data mining cell with adequate administrative set up and appropriate tools for generating early warnings, the report said.
However, the initiative was later shelved.

According to the report, another steering committee has been constituted to oversee implementation of the EWS project.
"... After a lapse of four years and even after constitution of two steering committees on the subject, the Ministry has failed to develop a foolproof EWS," the Parliamentary panel said.

Besides, the panel has asked the Ministry to apprise it about implementation of the mechanism to detect fraud at an early date through Market Research Analysis Unit (MRAU).
"The committee, while deprecating the laxity on the part of the Ministry, recommend that a coherent and efficacious fraud prediction/prevention framework be developed within a period of one month and the Committee be apprised about the progress in the matter," the report noted.