After Economic Liberalisation, India observed a sharp increase in financial and corporate

fraud, and it became extremely important for the country’s legislation to take a step towards
prevention of these frauds which costs both, the government’s, and the taxpayer’s money. To
counter the corporate fraud, it became important to revaluate, amend and put in place strict
regulations. The Serious Fraud Investigation Office originated. It was majorly responsibly for
conducting investigations under the current legal framework defined under Sections 235 to
247 of the Companies Act, 1956. The “Serious Fraud Investigation Office” eventually
received legal consideration under Section 211 of the Companies Act of 2013.
The SFIO is a multidisciplinary organisation with experts in forensic audits, information
technology, corporate law, taxes, capital markets, accounting, and other areas. Even if there
isn't blatant fraud, the SFIO looks at the Board's fairness and any potential oppression of the
shareholders. It is essential to remember that SFIO only responds to directions from the
Central Government and is unable to bring a case on its own. Although these powers are
restricted to the “Director, Additional Director, and Assistant Director”, the SFIO also has
the right to detain those who are associated with or have taken part in the fraud.

Talking about investigation of SFIO under Companies Act 2013, Pertaining to Section 210
(1) of the Companies Act, 2013, the Centre may order an investigation if it determines that it
is necessary, either after receiving a report from the Registrar or inspector under Section 208,
upon notification of a special resolution passed by the company indicating that the company's
affairs should be investigated, or if it determines that it is in the public interest.
The High Court of Madras ruled in Church of South India v. Union of India that it is the
Central Government's jurisdictional responsibility to offer an opinion on the need of an
inquiry by the Special Frauf Investigations Office (SFIO) when the SFIO is asked to do so
under Section 212. For this reason, any Central Government order issued prior to the
formulation of an "opinion" under Section 212 is invalid.

Now, talking about the evidentiary value of the SFIO Investigation, The Company Act 2013
Act places no deadline on the SFIO for finishing the inquiry and submitting the investigative
report, and the same has been stated in the case of SFIO Vs Rahul Modi. The time period
indicated in the order was found to be only advisory and not mandatory. According to Section
212(14), if there is enough evidence to support an allegation, the Central Government may
direct the SFIO to initiate legal action against the company and any of its officers or
employees after receiving and analysing the investigation report.
When the Central Government appoints the Special Fraud Investigation Office to investigate
a case under this Act, no other investigative agency of the Centre or any Government under
the state investigate in such matter regarding any offence under this Act. In cases where an
investigation has already been commenced, it must not be continued, and the concern shall be
passed to the SFIO. This is to ensure both the integrity and speed of the investigation in cases
of serious corporate fraud.
Talking about the power to arrest, If the Director, Additional Director, or Assistant Director
of the SFIO has probable cause to suspect that a person has committed an offence under
Section 212 during the course of an investigation, that individual may be arrested with the
Director's written consent. If the Director has probable cause to think that an individual must
be arrested in connection with an investigation into a foreign corporation or a government
company, he or she must first get authorisation from the Central Government.

A suggestion that I would like to make is that SFIO should have the authority to initiate
investigations into situations of its own will, since doing so would speeden up the process
and ould repeal the proabable involvement of corruption. To conclude, it can be said that
the Serious Fraud Investigation Agency is an organization that has been formed to investigate
frauds, primarily being of serious nature, and financial misinterpretation. Though this has to
be mentioned that SFIO does not hold the authority of initiating the case without authority
and only acts upon the orders given by the Centre. And does not act in its independent
capacity, it at times becomes problematic.

Director – Keshav Chandra

2G Spectrum Scam
The 2G spectrum scam was an Indian telecommunication scam and political scandal in which
politicians and government officials under the Congress government undercharged mobile
telephone companies for frequency allocation licenses, which they then used to create 2G
spectrum subscriptions for cell phones.

Sahara Scam
The Sahara -SEBI case is the case of the issuance of Optionally Fully Convertible Debentures
issued by the two companies of Sahara India Pariwar to which Securities and Exchange
Board of India had claimed its jurisdiction and objected on why Sahara has not taken
permission from it.
Satyam Scam
The founder and directors of India-based outsourcing company Satyam Computer Services,
falsified the accounts, inflated the share price, and stole large sums from the company. Much
of this was invested in property.
SFIO vs Rahul Modi
No deadlin for conclusion of an investigation
Church of INDIA
SFIO can act only on the direction of the central government.