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SFIO probing 63 chit fund cos for Companies Act violations

Last Updated: Thursday, August 8, 2013 - 18:30

New Delhi: The Serious Fraud Investigation Office (SFIO) is investigating 63 chit fund companies for alleged violations of the Companies Act.

The Corporate Affairs Ministry, under which SFIO functions, looks into violations of Companies Act by firms.

In a written reply to the Lok Sabha, Corporate Affairs Minister Sachin Pilot said SFIO is investigating as many as 63 chit funds, primarily for violating Companies Act.

"...While cases of fraud and cheating by the chit fund companies are under investigation by police authorities and the Securities and Exchange Board of India (Sebi), in respect of 63 such companies, SFIO is also investigating matters relating primarily to violations of Companies Act, 1956," Pilot said.

All the firms in the country are registered under the Companies Act 1956 and are required to comply with various norms as mandated by the legislation.

The minister also said "statutory recognition of SFIO is part of the Companies Bill, 2012".

To a separate question on corporate social responsibility (CSR), Pilot said that as per the new Companies Bill "every company having net worth of Rs 500 crore or more, or turnover of Rs 1,000 crores or more or net profit of Rs 5 crores or more during any financial year, shall constitute a CSR committee...".

According to the Minister, these committees would recommend activities for discharging CSR "in such a manner that the company would spend at least 2 percent of its average net profits of the previous three years on CSR activities".

"The companies will have latitude in designing project based CSR interventions," Pilot said.
"Reporting requirement etc will be discussed with all the stakeholders and defined once the Bill is enacted," he added.


First Published: Thursday, August 8, 2013 - 18:30
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