Lok Sabha Question No. 3999 (UNSTARRED), answered on 2016-12-09
Subject: Financial Crimes Committed by the Companies
Ministry: FINANCE
Asked by: MANOJ RAJORIA

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE

## LOK SABHA UNSTARRED QUESTION NO.3999

## ANSWERED ON FRIDAY, 9 th  DECEMBER, 2016 18 th  AGRAHAYANA, 1938 (SAKA)

## FINANCIAL CRIMES COMMITTED BY THE COMPANIES

## †3999. DR. MANOJ RAJORIA:

Will the Minister of FINANCE be pleased to state:

- (a) the  details  of  the  guidelines/instructions  issued  by  the  Government/Reserve Bank of India (RBI) to check financial frauds committed by the companies/firms ;
- (b) the number of cases registered and the guilty  punished during each of the last three years and the current year, case-wise; and
- (c) the remedial measures taken by the Government in this regard?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ARJUN RAM MEGHWAL)

- (a) to (c) : A statement is laid on the Table of the House.

STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (c)  OF  LOK  SABHA UNSTARRED QUESTION NO. 3999 BY DR. MANOJ RAJORIA TO BE ANSWERED ON 9 TH   DECEMBER,  2016  REGARDING  FINANICAL  CRIMES  COMMITTED  BY  THE COMPANIES

(a) to (c): Reserve Bank of India (RBI) issues from time to time detailed guidelines/instructions which  are  available  on  its  website/web-portal,  to  check  financial  frauds  committed  by companies/firms.

During the last  three  years  and  current  year  (up  to  31-10-2016),  the  Ministry  of    Corporate Affairs  has  ordered  investigation  into  the  affairs  of  companies  where  corporate  frauds, involving illegal collection of deposits/ funds from public, diversion, misutilisation of funds as well as manipulation of books of accounts and other records, etc., have come to light. These investigations have been ordered under the relevant provisions of the Companies Act, 1956 and 2013 through Serious Fraud Investigation Office (SFIO) of the Ministry of Corporate Affairs. Year-wise details of the cases referred to SFIO during the last three years and the current year (upto 31.10.2016) are as follows:

| Year    |   Investigations referred to SFIO |
|---------|-----------------------------------|
| 2013-14 |                                83 |
| 2014-15 |                                71 |
| 2015-16 |                               184 |
| 2016-17 |                                52 |
| Total   |                               390 |

Further, during the last three years and in the current year, SFIO has filed 258 prosecutions in various Courts.  In this period, 163 number of cases have been disposed of by the courts, of which  there  has  been  successful  conviction  in  77  cases  wherein  punishment  including imprisonment to directors as well as of fines have been imposed.

The  Government  has  taken  various  measures  to  strengthen  the  SFIO  to  check  fraud/ irregularities by companies, including:

- (i) the term 'Fraud' has been defined in the Companies Act, 2013;
- (ii) Statutory status to the SFIO;
- (iii)  Increasing  application  of  technology  for  early  detection  of  frauds  through  data mining and Forensic Audit, etc.

******