SFIO to have power to arrest under new Cos Bill: Minister of corporate affairs

Corporate affairs minister Veerappa Moily noted that in the present day, with technology is getting more and more sophisticated, the present laws will have to get more stringent in order to be able to combat financial fraud

New Delhi: Corporate fraud investigation body Serious Fraud Investigation Office (SFIO) will have the power to carry out arrests once the new Companies Bill is passed by Parliament, reports PTI quoting corporate affairs minister Veerappa Moily.

“SFIO shall have the power to arrest in respect of certain offences of the Bill which attract the punishment for fraud. Those offences shall be cognisable and the persons accused of any such offence shall be released on bail subject to certain conditions provided in the relevant clause in the Bill,” Mr Moily said at an Assocham conference here.

He added that the government expects the Companies Bill, 2011, to “modernise, reform and clean up the corporate sector”.

The SFIO shot into prominence after the government asked it to investigate the multi-crore rupee Satyam accounting fraud.

The decision to give legal and statutory powers to the SFIO by including appropriate provisions in the new Companies Bill—which is awaiting Parliament’s nod—is in line with the recommendations of the Vepa Kamesan Committee on strengthening the SFIO. The SFIO is under the administrative control of the corporate affairs ministry.

The eight-member committee had suggested that the SFIO should be given exclusive jurisdiction to probe and prosecute entities involved in financial frauds, as well as probe cases related to erring entities/individuals like chartered accountants and company secretaries.

The committee is of the opinion that the power of search and seizure and attachment should be entrusted to the SFIO, as available with the Income Tax authorities, Customs department, Enforcement Directorate, etc.

It has also suggested that the SFIO should be empowered to take up cases suo moto and even on source-based information if a fraud has been committed.

The committee has also recommended that the SFIO should have the flexibility to outsource the services of experts like chartered accountants, legal experts, etc, and officers joining the investigating agency on deputation should be ensured protection of their existing pay and allowances.

However, the minister noted that in the present day, with technology is getting more and more sophisticated, the present laws will have to get more stringent in order to be able to combat financial fraud.

SFIO is investigating 12 cases at the moment, including one against erstwhile retail chain Subhiksha.

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COMMENTS

Java

5 years ago

Why should different government departments be given such powers that belong to the police and judiciary? What provisions are there to prevent misuse by irresponsible and corrupt officials? Or is this going to be a legal pretext to freely extort more bribes from the corporate world?

Union KBC Mutual Fund launches Union KBC Dynamic Bond Fund

Union KBC Dynamic Bond Fund’s new fund offer closes 6th February

Union KBC Mutual Fund has launched Union KBC Dynamic Bond Fund, an open-ended income scheme.

The investment objective of the scheme is to actively manage a portfolio of good quality debt as well as money market instruments so as to provide reasonable returns and liquidity to the investors.

The new fund offer closes on 6 February 2012. The minimum investment amount is Rs5000.

CRISIL Composite Bond Fund Index is the benchmark index. Parijat Agrawal,
Head-Fixed Income is the fund manager.

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Maruti Suzuki India net profit falls 63.6%

Net profit during the December 2011 quarter stood at Rs205.60 crore, a fall of 63.6%

In the third quarter of the financial year 2011-12, Maruti Suzuki India registered net sales of Rs7,663.60 crore, a decline of 17.4% over the same period in the previous year. Net profit during the December 2011 quarter stood at Rs205.60 crore, a fall of 63.6%.

During the quarter, the company sold 211,803 units in the domestic market as compared to 299,527 units in the same period in the previous year. In exports, the company sold 27,725 units against 31,160 units in the previous year.

Unit sales in the quarter were impacted by sluggish market conditions caused by higher fuel prices and interest rates. Also, the company lost 40,000 units in production due to the industrial relations problem at Manesar.

The depreciation in the rupee during the quarter adversely impacted the bottomline through higher cost of imports for the company and its vendors and royalty.

In the late afternoon, Maruti Suzuki India was trading at around Rs1,113.40 per share on the Bombay Stock Exchange, 0.9% up from the previous close.

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