The Ministry of corporate affairs has drawn up plans to set up Corporate Intelligence Unit to tackle the increasing number of corporate frauds in the country.
According to sources, the ministry has sought support of Rs 150 crore in the forthcoming Budget to set up the unit and is keen that it becomes operational within six months. "In the last few years, the number of corporate fraud cases has increased. The nature of crime has also evolved. Keeping all these things in mind, the ministry has chalked out plans to set up a Corporate Intelligence Unit,'' a senior official told Mail Today.
"The unit will work along with the Serious Fraud Investigation Office (SFIO). While SFIO will look into high-profile cases that involves multiple agencies, this agency will look into other frauds, which will ease the burden of the SFIO," the official added. The SFIO looks into only high-profile cases recommended by the ministry.
The intelligence unit will also have expertise in dealing with cyber crime keeping in view the increasing number of online fraud cases. It will also have a dedicated team for analysing financial data in order to zero in on early signs of frauds.
According to the official, the ministry has already prepared a proposal after getting nod from the highest level.
Last week, corporate affairs minister Sachin Pilot had hinted at the proposal. "In the ministry, we are setting up an intelligence unit. It is at a nascent stage. We would be putting technical people with a lot of experience and expertise on the job and these would be the people who can mine data," he had said.
According to ministry records, in last four year, SFIO was ordered to probe alleged frauds in 83 companies including Reebok India, Vaishnavi Corporate Communications, Satyam Computer Services, Ambuja Cements, Ultratech Cement, ACC and Sesa Goa.
Pilot is of the view that if SFIO goes after "every small allegation", it will tend to lose focus on bigger corporate frauds. The minister is of the opinion that SFIO should be brought into the picture only when there is a larger public interest involved.
The government has also given more teeth to SFIO in the new Companies Bill, which contains special provisions for fraud and grants statutory status to the investigative agency.
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INCOME TAX DEPARTMENT:
What it does: Mainly looks into tax evasion
What it does: Looks into cases of money laundering and illegal money transaction through foreign exchanges
CENTRAL ECONOMIC INTELLIGENCE BUREAU:
What it does: Collects intelligence and information regarding aspects of the black economy
DIRECTORATE OF SERVICE TAX:
What it does: Monitors collection and assessment of service tax
SERIOUS FRAUD INVESTIGATION OFFICE:
What it does: Tackles cases of big financial frauds that involve many departments
REGISTRAR OF COMPANIES:
What it does: Looks into allegations of violation of company laws
Directorate of revenue:
What it does: Collects intelligence, analyses it and disseminates it in cases of violation of customs laws
Courtesy: Mail Today