COMPANY LAW ASSIGNMENT
TOPIC: SERIOUS FRAUD INVESTIGATION OFFICE ( SFIO )
Introduction
The financial scams and corporate frauds saw a huge rise after the liberalisation of
the economy and it was time for the lawmakers to deter such frauds which were
causing a loss of government and public money. It became necessary to re-evaluate
and implement stringent provisions to tackle Corporate Fraud. The increasing rate
of white-collar crimes required stiff penalties, exemplary punishments and
effective enforcement of the law with the right spirit. Some of the examples of
corporate frauds include Satyam scam, Sahara scam, Bofors scam, 2G spectrum
scam and many more which are still sub-judice in the different courts of our
country or are under the process of investigation by different agencies.
How was SFIO set up?
The Indian Government under Mr. Naresh Chandra (former cabinet secretary) set
up a Committee on Corporate Governance. The Committee inter-alia
recommended setting up of the Corporate Serious Fraud Office. Thereafter,
considering the recommendation of the committee in the backdrop of the failure of
non-banking companies resulting in a huge financial loss to the public, the Cabinet
decided to set up a Serious Fraud Investigation Office (SFIO).
Consequent to the decisions of the Cabinet, the Central Government issued a
resolution constituting this organisation in 2003. In continuation of the aforesaid
Resolution, charter of Serious Fraud Investigation Office stated the responsibilities
and functions of the SFIO.
What is SFIO?
SFIO is a multi-disciplinary organisation consisting of experts in the field of,
forensic auditing, accountancy, company law, information technology, law,
investigation, taxation and capital market for prosecuting or recommending
prosecuting or detecting any frauds or white collar crimes.
How does SFIO function?
The SFIO is to be headed by a director who should not be below the rank of
a Joint Secretary to the Government of India having expertise in dealing
with the matters relating to company frauds.
