Lok Sabha Question No. 1368 (UNSTARRED), answered on 2025-12-08
Subject: Investigation of Companies by SFIO
Ministry: CORPORATE AFFAIRS
Asked by: Dr. Rani Srikumar

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS LOK SABHA UNSTARRED QUESTION NO- 1368 ANSWERED ON MONDAY THE 8 TH  DECEMBER, 2025 Agrahayana 10, 1947 (SAKA)

Investigation of Companies by SFIO

1368, Dr. Rani Srikumar:

Will the Minister of Corporate Affairs be pleased to state:-

- (a) the status of the ongoing investigations being conducted by the Serious Fraud  Investigation  Office  (SFIO)  into  the  33  companies  with  Chinese investment links including the nature of the financial irregularities detected so far;
- (b) the specific findings, if any, related to suspected shell operations, fund diversion, violations of the Companies Act or misuse of foreign investments by these firms;
- (c)  the  reports/assessments  provided  by  enforcement  or  intelligence agencies  regarding  the  financial  and  national  security  risks  posed  by foreign-linked entities operating in India;
- (d)  the  measures  adopted  by  the  Union  Government  to  strengthen compliance monitoring, financial scrutiny and enforcement mechanisms for companies receiving foreign investments from high-risk jurisdictions; and (e) the expected timeframe for completion of the SFIO investigations into these 33 companies and the further regulatory/legal actions proposed by the Government based on the outcomes of the inquiry?

## ANSWER

THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS AND MINISTER  OF  STATE  IN  THE  MINISTRY  OF  ROAD  TRANSPORT  AND HIGHWAYS

[SHRI HARSH MALHOTRA]

(a) to (c) : The investigations u/s 212 of the Companies Act, 2013 have been completed. On the basis of the findings reported, appropriate enforcement actions  have  been  undertaken  including  initiating  striking  off  of  the companies  from  the  registry,  filing  prosecutions  against  the  accused persons for various violations under the Companies Act, 2013. The matters are sub judice.

(d):  The  provisions  of  the  Companies  Act,  2013  and  the  rules  made thereunder  contain  provisions  to  ensure  financial  accountability  and transparency in the management of companies. These provisions, inter alia, require maintenance of books of accounts and statutory registers at the registered offices, preparation of financial statements in accordance with applicable financial reporting/accounting standards and filing them with the Registrar  after  due  approvals.  Non-compliance  of  relevant  provisions attracts penal action. Some of the important aspects of the Companies Act, 2013 for safeguarding the interests of all stakeholders include: (i) Accountability for management of companies through appointment of key managerial personnel, requirement for approvals by Board of directors and shareholders in accordance with the applicable provisions; (ii)  Requirement for audit of financial statements by an independent chartered accountant; (iii) Requirement  to  make  disclosures  (in the form  of notices, resolutions, postal ballots, etc.), from time to time, to the shareholders for information and approval by the shareholders. (iv) Requirement to make adequate disclosures through Board's report including with regard to risk management, state of company's affairs, material  changes  affecting  company's  financial  position  and  other crucial parameters. (v)  Requirements  to  file  various  documents,  copies  of  resolutions, financial statements, returns, etc. with the Registrar from time to time. (e): As per the reply to parts (a) - (c) above.

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