Lok Sabha Question No. 2120 (UNSTARRED), answered on 2015-12-11
Subject: SFIO
Ministry: CORPORATE AFFAIRS
Asked by: C.S. PUTTARAJU

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UNSTARRED QUESTION NO. 2120 ANSWERED ON FRIDAY, THE 11 TH  DECEMBER, 2015 [AGRAHAYANA 20, 1937 (SAKA)]

SFIO

## QUESTION

2120. SHRI C. S. PUTTA RAJU:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a) the number of cases investigated by Serious Fraud Investigation Office (SFIO) during each of the last three years and the current year;
- (b) the number of cases disposed of and the number of convictions thereof along with pending cases before SFIO during the said period;
- (c) whether the SFIO has implemented a new institutional mechanism in the form of Market Research Analysis Unit (MRAU) to detect fraud at an early stage;
- (d) if  so,  the  details  thereof  and  amount  allocated  to  implement  the  said mechanism; and
- (e) the corrective measures taken/ being taken by the Government to preclude recurrence of corporate frauds?

## ANSWER

THE MINISTER OF CORPORATE AFFAIRS                              (SHRI ARUN JAITLEY)

(a) & (b) The numbers are as follows:

| Year                      |   No. of companies assigned for investigation |   No. of companies where investigations completed |
|---------------------------|-----------------------------------------------|---------------------------------------------------|
| 2012-13                   |                                            45 |                                                22 |
| 2013-14                   |                                            83 |                                                22 |
| 2014-15                   |                                            71 |                                                39 |
| 2015-16 (till 30-11-2015) |                                            35 |                                                23 |

As  on  30-11-2015,  investigations  into  the  affairs  of  127  companies  were  in progress  with  SFIO  and  investigation  of  one  company  has  been  stayed  by  Court. Further, during the last three years and current year (till 30-11-2015), SFIO has been able  to  secure  convictions  in  16  cases  through  courts  and  Disciplinary  Action Committees of the Institute of Chartered Accountants of India.

(c) to (e) In  an effort to identify fraudulent  activities  at  an  early  stage,  Market Research & Analysis Unit (MRAU) of SFIO analyses information in public domain as well as inputs received from various other sources. Such alerts have necessarily to be corroborated through examination of books of account and other records by the field  level  offices  of  the  Ministry  for  detection  or  identification  of  fraud.  Further, forensic lab set up in MRAU assists investigating teams with digital data analysis. No separate fund has been allocated for MRAU. Government has taken a number of measures to check cases of corporate frauds, including:

- (i) 'Fraud' as a substantive offence has been introduced in the Companies Act, 2013.
- (ii) Statutory status to the SFIO has been granted under the said Act.
- (iii) Stricter  norms  of  Corporate  Governance  and  their  implementation  have  been granted under the Companies Act, 2013.
- (iv) Increasing application of technology for early/ preliminary identification of cases involving frauds through data analysis and usage of forensic tools, etc.

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