Serious Fraud Investigation Office (SFIO) – Old wine in new bottle?
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Ms. Priyanka Venkatapathy M.L. (Awaiting CS membership)
History of SFIO:-
9 January 2003—Government approved setting up of an organisation named “Serious Fraud Investigation Office” on the basis of the recommendations made by the Naresh Chandra Committee Report on Corporate Governance.
Committee was keen in establishing “a multi-disciplinary team -
Serious Fraud Investigation Office was initially set up by an executive order, under the corporate affairs ministry. We can accept to a certain extent that the expectations of the Committee were met to some extent by SFIO.
SFIO will not be forgotten for its role in Satyam Scandal, alleged fraud in Reebok India or Sesa Goa' frauds. It functions even today with its Head Quarters in national capital, New Delhi.
SFIO’s new relationship with the new Companies Act, 2013:-
What is the relationship between SFIO and the Companies Act, 2013? Section 211 of the Act answers the question and clears our doubts. SFIO was not a statutory body and this was an inherent defect limiting its power in any investigations. But now on notification of Section 211, SFIO will be a statutory body having wide powers necessary for a fraud investigation agency.
Section 211(1) reads that the Central Government shall establish a Serious Fraud Investigation office to investigate frauds relating to the Company. It also states that until such office is established the existing Serious Fraud Investigation Office shall be the Serious Fraud Investigation Office for the purpose of this section.
What is the structure of SFIO?
The Serious Fraud Investigation Office shall be headed by a Director.
It will consist of such number of experts from banking, corporate affairs, taxation, forensic audit, capital market, information technology, law or such other fields to be appointed by the Central Government from amongst persons of ability, integrity and experience in the said fields.
Other points to be noted:-
(1) Central Government will appoint a Director in the Serious Fraud Investigation Office, who shall be an officer not below the rank of a Joint Secretary to the Government of India having knowledge and experience in dealing with matters relating to corporate affairs.
(2) Central Government may appoint such experts and other officers and employees in the Serious Fraud Investigation Office for efficient discharge of its functions under this Act.
Will be it a welcome move?
The most aspired Good Corporate Governance will be a close target only if government has the help of an agency like SFIO. The inclusion of SFIO under the new Act will definitely help SIFO with some autonomy. This will definitely go further in providing wide powers and thereby giving teeth to the agency.
Please don’t forget to visit the official website of SFIO (http://www.sfio.nic.in/) for understanding its present structure and other important details.
We will discuss about the powers and other affairs of SFIO in the next article.
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Ms. Priyanka Venkatapathy M.L. (Awaiting CS membership)
Has SFIO existed prior to Companies Act 2013?
Section in Co's Act which creates SFIO
Composition of SFIO
Please read more...
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Serious Fraud Investigation Office (“SFIO”) is much talked about, when we speak about the new companies Act. But is this a brain child of Companies Act, 2013? Definitely not.
It is not a brain child but adopted child. We will discuss about the history, and present status and the new status of SFIO in this article. We will go into the powers and affairs of the SFIO in the next article.
Photo Courtesy:- http://www.thehindubusinessline.com/
It is not a brain child but adopted child. We will discuss about the history, and present status and the new status of SFIO in this article. We will go into the powers and affairs of the SFIO in the next article.
Photo Courtesy:- http://www.thehindubusinessline.com/
History of SFIO:-
9 January 2003—Government approved setting up of an organisation named “Serious Fraud Investigation Office” on the basis of the recommendations made by the Naresh Chandra Committee Report on Corporate Governance.
Committee was keen in establishing “a multi-disciplinary team -
Ø
Ø which is able to direct & supervise prosecutions
under various economic legislation through appropriate agencies.
SFIO will not be forgotten for its role in Satyam Scandal, alleged fraud in Reebok India or Sesa Goa' frauds. It functions even today with its Head Quarters in national capital, New Delhi.
SFIO’s new relationship with the new Companies Act, 2013:-
What is the relationship between SFIO and the Companies Act, 2013? Section 211 of the Act answers the question and clears our doubts. SFIO was not a statutory body and this was an inherent defect limiting its power in any investigations. But now on notification of Section 211, SFIO will be a statutory body having wide powers necessary for a fraud investigation agency.
Section 211(1) reads that the Central Government shall establish a Serious Fraud Investigation office to investigate frauds relating to the Company. It also states that until such office is established the existing Serious Fraud Investigation Office shall be the Serious Fraud Investigation Office for the purpose of this section.
What is the structure of SFIO?
The Serious Fraud Investigation Office shall be headed by a Director.
It will consist of such number of experts from banking, corporate affairs, taxation, forensic audit, capital market, information technology, law or such other fields to be appointed by the Central Government from amongst persons of ability, integrity and experience in the said fields.
Other points to be noted:-
(1) Central Government will appoint a Director in the Serious Fraud Investigation Office, who shall be an officer not below the rank of a Joint Secretary to the Government of India having knowledge and experience in dealing with matters relating to corporate affairs.
(2) Central Government may appoint such experts and other officers and employees in the Serious Fraud Investigation Office for efficient discharge of its functions under this Act.
Will be it a welcome move?
The most aspired Good Corporate Governance will be a close target only if government has the help of an agency like SFIO. The inclusion of SFIO under the new Act will definitely help SIFO with some autonomy. This will definitely go further in providing wide powers and thereby giving teeth to the agency.
Please don’t forget to visit the official website of SFIO (http://www.sfio.nic.in/) for understanding its present structure and other important details.
We will discuss about the powers and other affairs of SFIO in the next article.
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