Serious Fraud Investigation Office (SFIO)

The Supreme Court, while dismissing a petition for quashing a complaint filed by the Serious Fraud Investigation Office (SFIO), has left a crucial question of law open i.e., whether SFIO are police officer(s) under the Code of Criminal Procedure, 1973.

Serious Fraud Investigation Office (SFIO)

• It is a corporate fraud investigating agency set up by the Government of India.
• The SFIO was established on 21st July, 2015, and operates under the Ministry of Corporate Affairs.
• Section 211 of the Companies Act, 2013, accorded a statutory status to the SFIO.
• Objective: The core objective of the SFIO is to be an investigative and law enforcement agency to detect and prosecute or recommend to prosecute white-collar frauds or crimes.
• Types of Investigations: SFIO will usually take up the following types of cases sent by the Central Government:
  • Complex cases needing investigation across multi-discipline and inter-departmental affairs.
  • Cases with a huge monetary impact on the public.
  • Cases where investigation can lead to the cleaning up of systems and the implementation of changes in laws and procedures.
  • Serious fraud cases sent by the Department of Company Affairs.
• SFIO can also take up cases on its own only when decided by the Director of the SFIO, and also giving the reasons for taking up the case in writing.
• Upon assignment of a case to the SFIO, no other investigative agency can proceed with an investigation for any offence under the Act.
• The Central Government can ask the SFIO to investigate a company in the following cases:
  • When it receives a report from the Registrar or Inspector under Section 208 of the Companies Act 2013.
  • When the company itself passes a special resolution and requests an investigation.
  • Where there is a huge monetary impact on the public or for other large-scale public interest cases.
  • When any Central Government or State Government department makes a request for an investigation.
• Organisational Structure:
  • It consists of experts in the fields of accountancy, forensic auditing, law, information technology, investigation, company law, capital markets and taxation.
  • SFIO 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.

Headquarters: The headquarters of SFIO is in New Delhi, with five regional offices in Mumbai, New Delhi, Chennai, Hyderabad, and Kolkata.

Forensic auditing?

A forensic audit is an analysis and review of the financial records of a company or person to extract facts, which can be used in a court of law. Forensic auditing is a specialty in the accounting industry, and most major accounting firms have a department of forensic auditing. Forensic audits include the experience in accounting and auditing practices as well as expert knowledge of forensic audit's legal framework.