Details of Investigation of Corporate Frauds by SFIO completed during last three years

Details of Investigation of Corporate Frauds by SFIO completed and prosecutions/petitions in Company Law Board filed during the period of last three years

Ministry of Corporate Affairs

Press Release

08-03-2016

To investigate corporate frauds of serious and complex nature the Government has set up a Serious Fraud Investigation Office (SFIO). The SFIO established vide Government of India’s Resolution No. 45011/16/2003-Admn-I dated 02-07-2003, has been notified under sub-section (1) of Section 211 of the Companies Act, 2013, vide Government of India, Gazette Notification S.O. 2005(E) dated 21.07.2015.

            Details of investigations completed and prosecutions/petitions in Company Law Board filed (including in respect of investigations completed in earlier years) by SFIO during the period of last three years and the current year (up to 31-12-2015), are as under:

The nature of frauds detected involve:-

(i) Falsification of financial statements through inflated sales, overstatement of assets and understatement of liabilities;

(ii) Collection of deposits by companies under the guise of real estate, chit fund, etc. by alluring small investors with astronomical returns within short time without meeting the promises;

(iii) Fraudulent transactions;

(iv) Manipulation through related party transactions;

(v) Siphoning off and diversion of funds generated through various sources.

Government has taken a number of measures to curb and prevent corporate frauds, which include;

(i) Declaring ‘Fraud’ as a substantive offence has been introduced in the Companies Act, 2013.

(ii) Statutory status to the Serious Fraud Investigation Office has been granted under the Companies Act, 2013.

(iii) Stricter norms of Corporate Governance and their implementation under the Companies Act, 2013.

(iv) Increasing application of technology for early detection of frauds through data analysis, surveillance and usage of forensic tools, etc.

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Rajya Sabha today.

• Once ITR is filled in response to notice u/s 148 though late, notice u/s 143(2) is must – ITAT
• Petitioner was not disqualified in tender for giving EMD by way of FD not DD
• State Bank of India elects four Directors in its Central Board
• Declaration of additional income by increasing the WIP was not proper – ITAT
• Cash payment for purchase of land or property not violation of 269SS or 269T