SFIO detects corporate frauds of Rs 10,800 crore involving 31 firms

Written by fe Bureau | New Delhi | Updated: Jul 27 2014, 02:06am hrs
The Serious Fraud Investigation Office (SFIO) under the ministry of corporate affairs has detected corporate frauds of more than Rs 10,800 crore involving 31 companies during its probes in the last three-and-half years. The SFIO completed probes in 78 cases of corporate frauds since 2011-12 till June-end this year, Parliament was informed on Friday.

During FY12, FY13, FY14 and the current financial year, SFIO has completed investigations in 78 cases, said Nirmala Sitharaman, minister of state for corporate affairs in a written reply to the Lok Sabha. In these investigations, frauds amounting to Rs 10,818 crore involving 31 companies have been detected, she added.

Sitharaman also informed the House that a Market Research and Analysis Unit (MRAU) has been set up in SFIO to analyse media reports relating to financial frauds and for conducting market surveillance of such corporates.

In order to strengthen MRAU's functioning, an expert committee was constituted and on the basis of its recommendations a forensic lab with appropriate technology and skilled technical manpower has been set up in SFIO, she said.

SFIO has no power to settle cases on its own, the minister said, adding that it was continuous endeavour of the government to upgrade skills, systems and knowledge through improved coordination mechanisms with other investigating agencies to deal effectively with corporate frauds.

Responding to a query on alleged ponzi schemes run by 34 companies in Madhya Pradesh, Sitharaman said that market regulator Sebi has initiated action against these entities. Of the total 34 companies, the regulator is examining cases of 25 entities, while it has passed interim orders against 4 and a final order against 1 entity. Also 4 cases have been either closed or referred to other agencies for initiating necessary action.

The minister also said that CBI in its primary probe found that out of 33 companies referred to it, 13 companies were not conducting their business legally. The state police registered FIRs against 8 out of these companies.

On a query related to unfair trade practices by multi-nationals, Sitharaman said: The Competition Commission of India has neither received any information nor taken any suo moto action in the matter pertaining to adverse impact of the predatory pricing strategy adopted by MNCs on Indian industries especially those related to trade of undervalued import of butyle acrylate and methyl methcrylate.