Govt ordered serioud fraud probe against 196 companies in nearly three years


The Corporate Affairs Ministry ordered SFIO probe for alleged fraud against 196 companies in nearly three years, with 42 of them coming under the scanner in the current fiscal.

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In a written reply to the Rajya Sabha today,

Corporate Affairs Minister Arun Jaitley said the Serious Fraud Investigation Office (SFIO) probe was ordered with respect to 42 companies in the current financial year till December 2015.

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SFIO, which comes under the ministry, was asked to probe the affairs of 83 companies in 2013-14 and the number stood at 71 in 2014-15.

From 2013-14 till December 31, 2015, SFIO investigation was ordered against a total of 196 companies.

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“These cases involve allegations of fraud through running of schemes by companies for collecting money from the public,

siphoning off/diversion of funds belonging to companies by the promoter/directors, manipulation of books of accounts and other records,” Jaitley said.

In the current fiscal, till December 2015, SFIO completed 39 investigations and filed 44 prosecutions.

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To a separate query related to start-ups, Jaitley said there is no estimate of investment in such entities.

An action plan for startups was released by the government on January 16, which includes funding support and incentives.

Responding to a question on whether there is a flaw in the Companies Act which does not provide for carry-forward of unspent corporate social responsibility (CSR) obligations, the minister replied in the negative.

“The Ministry of Corporate Affairs in its circular dated January 12, 2016, has clarified that the board of the company is free to decide whether any unspent amount from out of the minimum required CSR expenditure is to be carried forward to the next year.

“This provision is uniformly applicable to all CSR eligible companies, including public sector undertakings,” Jaitley said.

Under the Companies Act, 2013, certain classes of profitable entities are required to shell out at least 2 per cent of their three-year annual average net profit towards CSR activities.