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
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
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
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.