Par panel pulls up MCA for 'non-serious approach' towards SFIO



Par panel pulls up MCA for `non-serious approach` towards SFIO New Delhi: A parliamentary committee has pulled up the Corporate Affairs Ministry for not being serious enough to give teeth to its investigative arm SFIO, which probed the multi-crore fraud at Satyam Computer among others.

In its report tabled in Parliament, the Standing Committee on Finance, headed by BJP leader Murli Manohar Joshi said it "strongly deprecates the non-serious approach of the Ministry towards strengthening SFIO to effectively unearth and prevent corporate frauds".

The panel recommended the ministry should take steps to implement the suggestions of the Vepa Kamesan Committee and also consider granting statutory status to SFIO, which should contain provisions to empower the investigative agency to effectively probe corporate offences.

The 31-member parliamentary panel pointed out that the Vepa Kamesan committee has suggested that SFIO be given statutory recognition with the obligation for other entities to co-operate with it.

Vepa Kamesan Committee was constituted in 2006 to provide suggestions to the Government to review and decide on future course of action of the Serious Fraud Investigation Office (SFIO).

The committee also wanted the ministry to separately define offence deal with instances of "unauthorised removal and concealment, destruction, tampering with company records" for a firm under investigation or a related party.

The parliamentary panel also wanted the ministry to separately define offence deal with instances of "unauthorised removal and concealment, destruction, tampering with company records" for a firm under investigation or a related party.

Corporate Affairs Minister Salman Khurshid had earlier told a news agency that if the SFIO had all powers, possibly the CBI may not have been needed to investigate the mega scam in Satyam Computer.

The eight-member Vepa Kamesan committee, in its report submitted in June, also suggested that power of search and seizure, attachment should be entrusted to SFIO as available with the Income Tax authority, customs, Enforcement Directorate etc.

Besides, the SFIO should be empowered to take up a case sou moto and even on a source-based information if a corporate fraud has been committed, it said, adding, the body should also have the flexibility to outsource the services of experts like chartered accountants, legal experts etc.

The SFIO was constituted in 2003 in the backdrop of stock market scams, failure of non-banking financial companies, phenomena of vanishing companies and plantation companies.

The organisation has at present no separate statute and is carrying out investigations under sections 235 and 247 of the Companies Act 1956.

PTI