Serious Fraud Investigation Office (SFIO) is a multi-disciplinary organization under Ministry of Corporate Affairs, consisting of experts in the field of accountancy, forensic auditing, law, information technology, investigation, company law, capital market and taxation for detecting and prosecuting or recommending for prosecution white-collar crimes/frauds.
SFIO has head office in New Delhi and regional offices in Maharashtra, Andhra Pradesh, Tamil Nadu and West Bengal .
1. Serious Fraud Investigation Office was set up by the Government of India by way of a resolution dated 2nd July, 2003. At that time SFIO did not enjoy a formal legal status. It carried out investigations within the existing legal framework under section 235 to 247 of the erstwhile Companies Act, 1956.
2. Section 211 of the Companies Act, 2013, has accorded statutory status to the Serious Fraud Investigation Office. By virtue of various other provisions of the Companies Act, 2013, SFIO is vested with the requisite legal authority to conduct investigation.
3. An investigation into the affairs of a company can be initiated by the Central Government and entrusted to the Serious Fraud Investigation Office under the following circumstances:-
(a) on receipt of a report of the Registrar or inspector under section 208
(b) on intimation of a special resolution passed by a company that its affairs are required to be investigated
(c) in public interest
(d) on request from any Department of the Central Government or a State Government
4. SFIO comprises experts from various relevant disciplines including law, banking, corporate affairs, taxation, capital market, information technology, forensic audit etc. The investigation report filed by the SFIO before the designated court shall be deemed to be a report filed by a police officer for framing the charges.
Director of SFIO :
Shri Amardeep Singh Bhatia, IAS is Director, SFIO. He is a 1993 batch IAS officer of Nagaland cadre. Before Director SFIO he was Joint Secretary in Ministry of Corporate Affairs.
Hierarchy of SFIO :
(Post – Sanctioned Strength)
Executive Posts –
Addl. Director / Joint Director (18)
Deputy Director (8)
Sr. Asstt. Director (29)
Asstt. Director (30)
Other Posts –
Sr. Prosecutor (5)
Private Secretary (9)
Office Superintendent (2)
Personal Assistant (16)
History of SFIO
1. The Government of India had set up a Committee on Corporate Governance under the Chairmanship of Shri Naresh Chandra, former Cabinet Secretary. The Naresh Chandra Committee inter-alia recommended setting up of Corporate Serious Fraud Office. The recommendations of Naresh Chandra Committee were as under:-
i) A Corporate Serious Fraud Office should be set up in the Department of Company Affairs with specialists inducted on the basis of transfer/deputation and on special term contracts.
ii) This should be in the form of a multi-disciplinary team that not only uncovers the fraud, but able to direct and supervise prosecutions under various economic legislations through appropriate agencies.
iii) There should be a Task Force constituted for each case under a designated team leader
iv) In the interest of adequate control and efficiency, a Committee each, headed by the Cabinet Secretary should directly oversee the appointments to, and functioning of this office, and coordinate the work of concerned departments and agencies.
v) Later, a legislative framework, along with the lines of the SFO in the UK, should be set up to enable the CSFO to investigate all aspects of the fraud, and direct the prosecution in appropriate Courts.
2. Consequent to the recommendation of Naresh Chandra Committee and in the backdrop of stock market scams as also the failure of non-banking companies resulting in huge financial loss to the public, the Cabinet in its meeting held on 9th January, 2003, decided to set up a Serious Fraud Investigation Office.
3. As per the decisions of the Cabinet, the Central Government issued a resolution on 2nd July, 2003 constituting this organisation. In continuation of the aforesaid Resolution, charter of Serious Fraud Investigation Office was issued by the Government on 21st of August, 2003 which inter alia stated that the responsibilities and functions of the SFIO will include, but not be limited to the following:-
a) The SFIO is expected to be a multi-disciplinary organisation consisting of experts in the field of accountancy, forensic auditing, law, information technology, investigation, company law, capital market and taxation for detecting and prosecuting or recommending for prosecution white collar crimes/frauds.
b) The SFIO will normally take up for investigation only such cases, which are characterized by –
i) Complexity and having inter-departmental and multi- disciplinary ramifications;
ii) Substantial involvement of public interest to be judged by size, either in terms of monetary
iii) The possibility of investigation leading to or contributing towards a clear improvement in systems, laws or procedures.
c) The SFIO shall investigate serious cases of fraud received from Department of Company Affairs. SFIO may also take up cases on its own, subject to para (d) below. The SFIO would make investigations under the provisions of the Companies Act, 1956 and would also forward the investigated reports on violations of the provisions of other acts to the concerned agencies for prosecution/appropriate action.
d) Whether or not an investigation should be taken up by the SFIO would be decided by the Director, SFIO who will be expected to record the reasons in writing. These decisions will be further subject to review by a coordination committee.
4. With a view to review the functioning of the SFIO and to make it more effective, the Central Government constituted an Expert Committee under the Chairmanship of Shri VepaKamesam formerly Deputy Governor, Reserve Bank of India. The committee deliberated upon various issues relating to investigation of corporate fraud, based on the experience of SFIO and the recent developments in India and global arena. In its report dated 29th April, 2009, the committee gave various recommendations to suggest statutory, administrative and organizational changes for improving the effectiveness and to ensure efficient discharge of duties by SFIO. The committee had carefully considered views and opinions of different regulatory and investigative agencies and gave its recommendations to the Ministry in developing its proposals for legislative changes and institutional development towards dealing with corporate fraud effectively and also making SFIO an effective investigative and law enforcement agency.
5. As per the Companies Act, 2013 , Serious Fraud Investigation Office (SFIO) has been established through the Government of India vide Notification NO. S.O.2005(E) dated 21.07.2015. It is a multi-disciplinary organisation under the Ministry of Corporate Affairs, consisting of experts in the field of accountancy, forensic auditing, banking, law, information technology, investigation, company law, capital market and taxation etc. for detecting and prosecuting or recommending for prosecution white collar crimes/frauds.
6. Investigation into the affairs of a company is assigned to SFIO, where Government is of the opinion that it is necessary to investigate into the affairs of a company –
(a) On receipt of a report of the Registrar or inspector under section 208 of the Companies Act, 2013;
(b) On intimation of a special resolution passed by a company that its affairs are required to be investigated;
(c) In the public interest; or
(d) On request from any department of the Central Government or a State Government
7. The Office 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 Headquarter of SFIO is at New Delhi, with five Regional Offices at Mumbai, New Delhi, Chennai, Hyderabad & Kolkata
The agency has 4 regional offices in Hyderabad, Mumbai, Kolkata and Chennai.