Lacking Bite
Despite being armed with statutory and arrest powers, SFIO investigations have led to few convictions. This raises questions about its effectiveness
- Dec 24, 2019,
- Updated Dec 25, 2019 7:43 PM IST
The Serious Fraud Investigation Office (SFIO), the government agency that investigates white-collar crimes in India, made its first arrest on 8 August 2019, almost two years after it was given the powers to do so in 2017. And it was a big catch. SFIO arrested Neeraj Singal, the erstwhile promoter and Managing Director of Bhushan Steel. Singal was found to have used a web of shell companies, owned directly and indirectly by him and his family, to siphon off thousands of crores borrowed from public sector banks, causing wrongful losses to the banks.
Singal's arrest could have been a shot in the arm for the agency, which has been in existence for over a decade and still faces a credibility crisis. Not everyone is convinced about its effectiveness in closing cases of fraud and other crimes committed under the Companies Act. Legal experts and law enforcement personnel say that while the agency has investigated several cases, very few of these investigations have led to conviction.
Shiju P.V., partner at legal firm IndiaLaw LLP, says, "There are no closures in SFIO investigations. You go, they give you a report, (but) you cannot see any conclusion. Investigation is one thing? you don't see conviction."
The criticism holds some truth. Numbers indicate that SFIO has not accomplished much when it comes to getting convictions and collecting fines.
The Serious Fraud Investigation Office (SFIO), the government agency that investigates white-collar crimes in India, made its first arrest on 8 August 2019, almost two years after it was given the powers to do so in 2017. And it was a big catch. SFIO arrested Neeraj Singal, the erstwhile promoter and Managing Director of Bhushan Steel. Singal was found to have used a web of shell companies, owned directly and indirectly by him and his family, to siphon off thousands of crores borrowed from public sector banks, causing wrongful losses to the banks.
Singal's arrest could have been a shot in the arm for the agency, which has been in existence for over a decade and still faces a credibility crisis. Not everyone is convinced about its effectiveness in closing cases of fraud and other crimes committed under the Companies Act. Legal experts and law enforcement personnel say that while the agency has investigated several cases, very few of these investigations have led to conviction.
Shiju P.V., partner at legal firm IndiaLaw LLP, says, "There are no closures in SFIO investigations. You go, they give you a report, (but) you cannot see any conclusion. Investigation is one thing? you don't see conviction."
The criticism holds some truth. Numbers indicate that SFIO has not accomplished much when it comes to getting convictions and collecting fines.