Serious Fraud Investigation Office (SFIO)

15.10.2024

Serious Fraud Investigation Office (SFIO)

Why in the news?

The Serious Fraud Investigation Office (SFIO) recorded the statement of the daughter of Kerala Chief Minister and owner of a now-dormant information technology firm, raising a political storm recently.

About Serious Fraud Investigation Office (SFIO):

• It is a corporate fraud investigating agency set up by the Government of India.
• It was established on 21st July, 2015. Section 211 of the Companies Act, 2013, accorded a statutory status to the SFIO.
• It is a multi-disciplinary organization under the Ministry of Corporate Affairs, consisting of experts in the fields of accountancy, forensic auditing, law, information technology, investigation, company law, capital markets and taxation for detecting and prosecuting or recommending for the prosecution of white-collar crimes/frauds.

SFIO takes up for investigation cases characterized by:

• Complexity and having interdepartmental and multidisciplinary ramifications.
• Substantial involvement of public interest to be judged by size, either in terms of monetary.
• The possibility of investigation leading to or contributing towards a clear improvement in systems, laws, or procedures.
• Investigate serious cases of fraud received from the Department of Company Affairs.
• Investigation into the affairs of a company is assigned to SFIO, where the Government is of the opinion that it is necessary to investigate into the affairs of a company-

○on receipt of a report of the Registrar or inspector under section 208 of the Companies Act, 2013

○on intimation of a special resolution passed by a company that its affairs are required to be investigated

○In the public interest; or on request from any department of the Central Government or a State Government

• The SFIO can also take up cases on its own only when decided by the Director of the SFIO, and also give the reasons for taking up the case in writing.
• Upon assignment of a case to the SFIO, no other investigative agency can proceed with an investigation for any offence under the Act.
• SFIO is headed by a Director as Head of Department in the rank of Joint Secretary to the Government of India.

○The Director is assisted by Additional Directors, Joint Directors, Deputy Directors, Senior Assistant Directors, Assistant Directors, Prosecutors, and other secretarial staff.

• The headquarters of SFIO is in New Delhi with its regional offices in Mumbai, Chennai, Hyderabad, and Kolkata.

                                                                        Source: The Hindu

Consider the following statements regarding the Serious Fraud Investigation Office (SFIO):

Statement-I: It is a corporate fraud investigating agency set up by the Government of India.

Statement-II: It is a multi-disciplinary organization under the Union Ministry of Finance.

Which one of the following is correct in respect of the above statements?

A.Both Statement-I and Statement-II are correct, and Statement-II is the correct explanation for Statement-I.

B.Both Statement-I and Statement-II are correct, and Statement-II is not the correct explanation for Statement-I.

C.Statement-I is correct, but Statement-II is incorrect.

D.Statement-I is incorrect, but Statement-II is correct.

Answer C