'SFIO should play the role of whistle blower'

 A whistle blower is a person who indicates misconduct in a company. The Vepa Kamesam Committee, set up in 2006 to review the functioning of the investigating agency, has recommended to the Ministry of Corporate Affairs that there should be a whistle blower policy in the Companies Act in the short run and in the SFIO Act in the long run to detect corporate frauds at early stage.

Separate statute

The panel has recommended a “separate statute for the SFIO should be considered in the long run” apart from its recognition in the Companies Act.

The eight-member committee, headed by former deputy governor of RBI Vepa Kamesam, submitted its report recently to the ministry and has suggested the future course of action for the investigating agency. The report, according to the sources in the Committee, took into account the multi-crore rupee Satyam scam, which shook the corporate world. It has suggested that the investigating agency should have the powers to collect evidence from abroad through Letters Rogatory.

Commitee recommended

Making a case for establishing a high powered committee on pattern of Corporate Fraud Task Force of the US, the panel has said that it would help in coordination with other regulatory agencies and in monitoring investigation of cases referred to the SFIO. With the number and magnitude of corporate frauds increasing, the Committee has also said the government should consider establishing fast-track courts to ensure speedy disposal of prosecution.

Apart from providing the powers to seize books and papers and attach both movable and immovable properties, the panel said that punishment for fraud should be defined and may provide for imprisonment up to 10 years.

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