It will work on premises of Serious Fraud Investigation Office

Amid concern at the rise in corporate fraud cases, the Ministry of Corporate Affairs has launched three initiatives to strengthen its investigating mechanism, including one to establish a forensic laboratory attached to its Serious Fraud Investigation Office (SFIO).

The SFIO has signed memoranda of understanding with the National Institute of Electronics and Information Technology (NIELIT), which works under the Department of Electronics and Information Technology, and with the Financial Intelligence Unit (FIU-IND) of the Finance Ministry.

The NIELIT will set up the laboratory on the SFIO premises on an outlay of Rs. 3.80 crore. The turnkey project will be completed in two phases over the next two years. Similarly, the agreement with the FIU-IND will facilitate exchange of data and information relating to suspicious banking transactions under the Prevention of Money Laundering Act, 2002.

“For a sustainable growth of the Indian economy, a transparent corporate culture would always play a pivotal role... We are taking all… steps to make this happen,” Corporate Affairs Minister Sachin Pilot told The Hindu.

He stressed that developing a framework for fraud prediction was yet another step in this direction.

Disruption of economic activities through fraudulent activities by unscrupulous elements could dent investors’ confidence. “Hence, developing an early warning system to detect fraudulent activities is of critical importance. Collaboration among various specialised agencies of the government is crucial to achieve the desired objectives,” he said.

The FIU-IND, Mr. Pilot said, was helping the Ministry of Corporate Affairs and the SFIO by supplying them with information on suspicious banking transactions. Having access to the banking information available with, and the expertise of, the FIU-IND would help the SFIO conduct comprehensive investigations.

Mr. Pilot said the SFIO was developing a framework for prevention of fraud through an ‘early warning system.’ The Ministry was also revamping the SFIO’s Market Research & Analysis Unit to help it function as an intelligence unit.

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