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SFIO to be made part of new company law, says Khurshid

Last Updated: Sunday, September 13, 2009 - 14:12

New Delhi: The government has decided to include the Serious Fraud Investigation Office (SFIO) in the new Companies Bill 2009 to arm it with legal and statutory powers to probe corporate misdoings, Corporate Affairs Minister Salman Khurshid said.

"In terms of personnel, expertise, infrastructure and back-up, we have provided all that (to the SFIO)... the little bit left in terms of legal powers to investigate. We will provide in the Companies Bill. Once the bill is passed, I think we will be done," Khurshid reporters, when asked how he proposed to strengthen SFIO.

Set up by the Corporate Affairs Ministry in 2003, SFIO shot into prominence after the Government asked it to investigate into the multi-crore rupee Satyam accounting fraud on which it submitted a 14,000-page preliminary report to the government.

The decision to give legal and statutory powers to SFIO
by including it the new Companies Bill 2009, which is awaiting
Parliament nod, follows recommendations of the Vepa Kamesan
Committee report on strengthening SFIO.

"Yes, it is obviously following that (Vepa Kamesan report). But you know every commission there are some elements that you are unable to accept, some elements you are unable to implement ... largely it is the Vepa Kamesan," Khurshid said.

The Vepa Kamesam Committee, sources said, has considered
the multi-crore rupee Satyam scam in its recommendations.

SFIO had faced difficulty in gaining access to
information and people who had to be interrogated in the
Satyam fraud case and special court orders had to be taken to
proceed with the investigations, Khurshid said.

The eight-member committee has suggested that SFIO should
be given exclusive jurisdiction to probe and prosecute entities involved in financial frauds, besides also cases related erring entities/individuals like chartered accountants and company secretaries.

The committee is of the opinion that power of search and seizure, attachment should be entrusted to SFIO as available with the Income Tax authorities, customs, enforcement directorate etc.

It has also suggested that SFIO should be empowered to take up a case suo moto and even on a source-based information if a corporate fraud has been committed.

Besides, SFIO having the flexibility to outsource the services of experts like chartered accountants, legal experts etc and officers joining the investigating agency on deputation should be ensured protection of their existing pay and allowances, are also some of the suggestions of the committee, sources said.

Bureau Report

First Published: Sunday, September 13, 2009 - 14:12
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