Serious Fraud Investigating Office (SFIO) Would Prosecute Vaishnavi Group For Various Legal Violations

Serious Fraud Investigating Office (SFIO) Would Prosecute Vaishnavi Group For Various Legal ViolationsCorporate governance in India is all set to be streamlined. The starting point was the enactment of Indian Companies Act, 2013 (PDF) to improve the corporate culture in India. Corporate frauds investigation in India was also strengthened by the Companies Act, 2013.The powers of Serious Fraud Investigation Office (SFIO) were also enhanced so that they can effectively deal with corporate frauds and crimes in India.

To further refine the corporate environment of India, Ministry of Corporate Affairs (MCA) has also notified 183 sections of Indian Companies Act, 2013 that would change the way companies have to regulate their business in India and abroad. The corporate world of India would now be required to comply with the notified provisions (PDF) of Indian Companies Act, 2013 from April 1st 2014.

MCA has already issued some Rules under Chapter XIV of Indian Companies Act, 2013 pertaining to Inspection, Inquiry and Investigation by Indian Authorities and Serious Frauds Investigation Office (SFIO). The Suggestions Regarding Rules Pertaining to Inspection, Inquiry and Investigation (SFIO) by Perry4Law (PDF) has already been provided by us in this regard. Now even the Central Government permission is not required by Central Bureau of Investigation (CBI) to prosecute senior bureaucrats for corruption cases monitored by Supreme Court of India.

SFIO has on Wednesday informed Supreme Court of India that it would prosecute various Vaishnavi group companies owned by controversial former corporate lobbyist Niira Radia for alleged violation of the Companies Act. In an affidavit filed before the court, SFIO said that MCA has granted sanction and filing of prosecution against the companies, that once catered to high-profile clients like Tatas, Unitech and Reliance Industries, is under process. The agency also stated that on the direction of MCA it has also sent its reports to CBI and Income Tax department for taking action on their part.

The apex court was also informed that the SFIO was in the process of lodging a former complaint with ICAI (Institute of Chartered Accountants of India) and ICSI (Institute of Company Secretaries of India) for initiating disciplinary action against the concerned auditors and company secretaries respectively, as per MCA’s direction.