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Serious Frauds Investigation Office

Context:

The Serious Frauds Investigation Office (SFIO) has arrested the alleged mastermind of a widespread racket involving the setting up of shell companies with Chinese links and supply of dummy directors.

Relevance:

GS II: Polity and Governance

Dimensions of the Article:

  1. About Serious Fraud Investigation Office
  2. Objectives
  3. What are the Shell Companies?

About Serious Fraud Investigation Office

  • SFIO is a multi-disciplinary organization under Ministry of Corporate Affairs, consisting of experts in the field of accountancy, forensic auditing, law, information technology, investigation, company law, capital market and taxation for detecting and prosecuting or recommending for prosecution white-collar crimes/frauds. 
  • It has its head office in New Delhi.
  • The Computer Forensic and Data Mining Laboratory (CFDML) was set up in 2013 to provide support and service to the officers of SFIO in their investigations.
  • SFIO is headed by a Director as Head of Department in the rank of Joint Secretary to the Government of India.

Objectives

  •    Take up for investigation cases characterized by –       
    • complexity and having inter-departmental and multi- disciplinary ramifications.       
    • substantial involvement of public interest to be judged by size, either in terms of monetary        
    • the possibility of investigation leading to or contributing towards a clear improvement in systems, laws or procedures
  •    Investigate serious cases of fraud received from Department of Company Affairs.
  •    Investigate into the affairs of a company on: –         
    • on receipt of a report of the Registrar or inspector under section 208 of the Companies Act, 2013.          
    • on intimation of a special resolution passed by a company that its affairs are required to be  investigated          
    • on the public interest          
    • on request from any department of the Central Government or a State Government
What are the Shell Companies?
  • A shell company is a business that is officially registered, incorporated, or otherwise legally constituted in the economy but does not engage in any economic activity.
  • These are occasionally employed in a dishonest manner, such as to hide business ownership from the public or law authorities.

-Source: The Hindu


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