Panel moots nodal status for fraud office

It must also be able to undertake search & seizure operations


The eight-member committee, which submitted its report recently to the Corporate Affairs Ministry, was constituted in 2006 to review and decide on future course of action of SFIO, which was set up to function as an investigating arm of the ministry. SFIO should be the nodal agency and given prosecution power with legislative backing.
It also be given power to prosecute not only corporates involved in fraud, but also related erring entities/individuals like chartered accountants and company secretaries.
The panel has favoured more teeth as, at present, the investigating arm does not have powers to prosecute.  It opines that power of search and seizure, attachment should be entrusted to SFIO as available with the Income Tax authority, customs, Enforcement Directorate etc.
It further suggested SFIO should be empowered to take up cases sou moto and even on source-based information if a corporate fraud has been committed.
SFIO should also have flexibility to outsource services of experts like chartered accountants, legal experts etc and officers joining the investigating agency on deputation should be ensured protection of their existing pay and allowances, the panel said.
Further it recommended that the government should specify the offences and penalties to enable effective conduct of investigating agencies, the committee has suggested.

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