The Serious Fraud Investigation Office (SFIO), the government agency that investigates whitecollar 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.
Short of Target
Between 2003/04 and March 2017, SFIO filed over 1,200 prosecution cases and completed investigations in 312. In the four years to March 2018, the agency investigated 575 cases in all. However, only 12 cases saw a total of 93 convictions. Not a report card to be proud of.
This is the reason that when the agency was given the powers to arrest in 2017, there was hope that it would cease to be a toothless tiger, and the power to arrest would give it the required heft.
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