In response to an Unstarred Question in the Lok Sabha on December 2, 2024, the Ministry of Corporate Affairs discussed actions taken regarding corporate frauds in India. Over the past three years (April 2021 to October 2024), the Serious Fraud Investigation Office (SFIO) was assigned to investigate 36 serious fraud cases. The investigations were initiated based on reports from registrars, inspectors, or public interest concerns. The Market Research and Analysis Unit (MRAU), established within the SFIO in 2009, has focused on improving corporate sector regulation by acting as a repository of information, enhancing investigation skills, and coordinating with other agencies. The MRAU has analyzed complaints related to corporate fraud. Over the last three years, SFIO has filed 41 cases involving 1,135 individuals for violations of the Companies Act, with 54 cases disposed of, resulting in 25 convictions (including compounding).
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 959
ANSWERED ON MONDAY, 02ND DECEMBER 2024
AGRAHAYANA 11, 1946 (SAKA)
Establishment of SFIO in View of Elevated Corporate Frauds
959. Shri Shyamkumar Daulat Barve:
Will the Minister of CORPORATE AFFAIRS be pleased to state:
(a) whether the Government has taken note of the increasing number of corporate frauds in the country.
(b) if so, the details thereof and the action taken by the Government;
(c) whether the Market Research and Analysis Unit (MRAU) has been established in the Serious Fraud Investigation Office (SFIO) with a view to improve the corporate sector regulatory system;
(d) if so, the action taken by the Unit on such cases including the number of serious fraud cases, State-wise; and
(e) the number of the persons against whom charges have been proved and the action taken by the Government against the accused in serious fraud cases?
ANSWER
Minister of State in the Ministry of Corporate Affairs; Minister of State in the Ministry of Road Transport and Highways.
(Shri Harsh Malhotra)
(a) & (b): The Ministry of Corporate Affairs takes action on corruption frauds as defined under the Companies Act, 2013 and as per procedure laid out therein. Investigation in matter of serious frauds are assigned to the Serious Fraud Investigation Office (SFIO) under Section 212 of the Companies Act, 2013. In the last 3 years (01.04.21 to 31.10.24), investigation in 36 cases have been assigned to SFIO. The Investigations to SFIO is directed by the Central Government on the basis of report of the Registrar or Inspector or on receiving intimation of a special resolution passed by the Company or in public interest or on the request of any Department of the Central Government or State Government.
(c) & (d) : Market Research and Analysis Unit (MRAU) was set up in Serious Fraud Investigation Office (SFIO) vide O.M. No. 35011 I/27/2009-AD.III dated 20th August 2009 in New Delhi only, with following objectives:-
i. Repository of information;
ii. Improving investigation skills;
iii. Adoption of best practices;
iv. Co-ordination with other investigative agencies.
MRAU carries out activities including analysis of the complaints received against the corporates for fraudulent activities.
(e) : In the last 3 years, on the basis of the investigations conducted, SFIO has filed 41 cases for violation of various provisions of the Companies Act, 2013 against 1,135 persons, which are sub judice. Further, 54 cases have also been disposed off out of which 25 cases have resulted in convictions (including compounding).
