Give legislative support to SFIO: House panel

Written by Neha Pal | New Delhi | Updated: Dec 5 2009, 03:49am hrs
A parliamentary committee has rapped the non-serious approach of the corporate affairs ministry to strengthen the serious fraud investigation office (SFIO). The office tackles corporate frauds. The standing committee on finance has suggested giving legislative backing to the SFIO that would give it more power to effectively investigate corporate offences.

The committees report is part of its examination of the demand for grants to the corporate affairs ministry. The government would soon have to inform Parliament about the steps it plans to take to implement the recommendations of the committee. The CBI has recently informed the Hyderabad High Court that the size of the scam is above Rs 14,000 crore.

The SFIO was set up in 2003 and was slated to receive legislative powers on lines with the UKs serious fraud office. However, six years down the line it is still waiting to get that mandate.

The Vepa Kamesan Committee was constituted in 2006 to recommend steps to the government on assessment of the need of a separate statute to govern the constitution and functioning of the SFIO.

One of the major recommendations of the committee to the corporate affairs ministry was to consider strengthening the investigative powers of SFIO and to accord statutory recognition to the office in the Companies Act itself with the statutory obligation for other entities to cooperate with it.

Corporate affairs minister Salman Khurshid has recently said SFIO would be given special investigation powers under the new Company Law to make it an effective investigating agency. However, it would take more than a year for the new Company Act to be in place. In the Satyam case, the need to involve the Central Bureau of Investigation has raised questions on how equipped the SFIO is currently to deal with such frauds.

Admitting that the offices expertise was stretched to the last limit during the Satyam probe, Khurshid said lack of manpower was a handicap at the beginning of the probe.

Pointing out that the SFIO would be given statutory and legal powers in line with the Vepa Kamesan Committee report, the minister had said, The biggest problem is we could neither file requisition nor keep the records. We certainly could not interrogate. I think the committee recommendations will be taken care of in the Bill.