More powers soon for Serious Fraud Investigation Office to initiate probe

NEW DELHI: The country’s corporate fraud investigating agency will soon be given suo motu power to initiate probes if the recommendations of the Parliamentary Standing Committee on finance, which is reviewing the Companies Bill, are accepted by the corporate affairs ministry.

Given that corporate frauds are becoming increasingly sophisticated with improvement in technology , the Serious Fraud Investigation Office (SFIO) has been demanding more power in line with those enjoyed by the income tax authorities, the customs department and the Enforcement Directorate, among others.

“The revised Companies Bill has provisions to give SFIO suo motu powers to enable it to initiate probes on its own and also on the basis of analysis done by its competent market research and analysis wing,” Minister of Corporate Affairs Veerappa Moily told ET. The agency was set up by a Cabinet resolution in 2003 and put under the administrative control of the corporate affairs ministry.

Of late, it has been entrusted with many high-profile cases, like the Satyam scam or the more recent Rs 800-crore Reebok fraud, which is under investigation. “It’s important to understand that with such discretionary powers comes great responsibility as well as chances of it being misused.

So, checks and balances will need to be incorporated to do justice to these suo motu powers,” a top SFIO official said. The Companies Bill, 2011, will also give SFIO statutory recognition , as well as powers of arrest, raid and seizure, which are necessary to make the investigating agency more competent.