Serious Fraud Investigation Office (SFIO) - Investigation into affairs of Company
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Posted Date : 26-Feb-2023 , 01:47:51 pm | Posted By CA.Khurana Vivek
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Serious Fraud Investigation Office (SFIO) – Establishment
In 2002, the Naresh Chandra Committee had recommended setting up a ‘Corporate Serious Fraud Office’, to uncover corporate fraud, and supervise prosecutions under various economic legislations.
It came into existence mainly in response to the numerous corporate frauds which were reported in the Indian capital markets in the 1990s.
The Serious Fraud Investigation Office (SFIO) was established in 2003 under the Companies Act, 1956. without a statutory backing.
It is a multi-disciplinary organisation set up by the Government of India to investigate white-collar crimes impacting the Indian economy in a wide array of activities.
The investigations conducted by SFIO are primarily related to matters of serious financial irregularities and corporate frauds.
Serious Fraud Investigation Office (SFIO) – Establishment (Sec. 211)
The SFIO was granted statutory force for the first time through the Companies Act, 2013.
Serious Fraud Investigation Office (SFIO) has been established through the Government of India vide Notification No. S.O.2005(E) dated 21.07.2015.
To combat the rising number of corporate fraud cases in India, the 2013 Act introduced Section 447, which, for the first time, provided a definition of fraud as well as punishment for such an offence
It is a multi-disciplinary organization under the Ministry of Corporate Affairs, consisting of experts in the field of accountancy, forensic auditing, banking, law, information technology, investigation, company law, capital market and taxation, etc.
for detecting and prosecuting or recommending for prosecution white-collar crimes/frauds.
Section 212 - Investigation into affairs of Company by SFIO
(1) Without prejudice to the provisions of Section 210, where the Central Government is of the opinion, that it is necessary to investigate into the affairs of a company by the Serious Fraud Investigation Office —
(a) on receipt of a report of the Registrar or inspector under section 208;
(b) on intimation of a special resolution passed by a company that its affairs are required to be investigated;
(c) in the public interest; or
(d) on request from any Department of the Central Government or a State Government,
the Central Government may,
by order,
assign the investigation into the affairs of the said company to the Serious Fraud Investigation Office and its Director ,
may designate such number of inspectors, as he may consider necessary for the purpose of such investigation.
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