The Telegraph
Since 1st March, 1999
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New fraud cell to vet present cases

New Delhi, Jan. 14: The existing cases of corporate frauds, which are being investigated by the department of company affairs, can be brought within the purview of the Serious Frauds Investigating Office (SFIO) that is proposed to be established by the end of February.

Speaking to reporters here today, DCA secretary Vinod Dhall said, “Nothing stops us from taking the existing cases that are being looked into by the department to the SFIO.”

Last week, the Union cabinet had created a framework for the SFIO, which had earlier been promised by the finance minister as a deterrent to serious corporate crimes.

The secretary said the office is expected to be operational by the end of February. The office will be headed by a joint secretary or an additional secretary. He added the office will have search and seizure powers but only those which are currently available under the Companies Act.

“There is no new legislation on the SFIO; so it will be empowered by the Companies Act only,” Dhall said. As of now, the SFIO has no powers for prosecution.

The DCA secretary also announced that to reduce the burden of compliance by small and private companies, it has formed a new committee headed by Naresh Chandra.

One of the key recommendations of the Naresh Chandra committee on corporate governance and auditing regulations was to set up the serious frauds office.

The DCA secretary said the committee will make its recommendations with particular reference to the Companies Act 1956 and the Indian Partnership Act, 1932.

The committee will submit its recommendations regarding small and private limited companies to the DCA within 45 days of its meeting. The committee will complete its work within 90 days on all other issues, said Dhall. DCA today said that it has launched 117 prosecutions against 229 vanishing companies. It said that Sebi has barred 92 companies and 352 directors from raising money from capital markets or dealing with the capital markets in any form for five years.

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