Now, SFIO has powers to arrest
New Delhi: The Serious Fraud Investigation Office (SFIO) now has powers to arrest people for violations of companies law, with the government notifying relevant provisions amid the crackdown on illicit fund flows.
The shot in the arm for the probe agency also comes at a time when the government is cracking the whip on suspected shell companies being used for illegal activities, including money laundering and tax evasion.
While the Companies Act, 2013 provides powers of arrest to the SFIO, which comes under the corporate affairs ministry, the provision has been notified only now.
Most provisions of the Act came into force on April 1, 2014. The SFIO is a multi-disciplinary organisation having experts for prosecution of white-collar crimes and frauds under the companies law.
The ministry has notified the rules pertaining to arrests in connection with Investigation by the SFIO and they came into effect from August 24.
The director as well as additional or assistant director level officials at the SFIO can arrest a person if they believe he or she is guilty of any offence with regard to the case being probed, the ministry said in a notification. According to the ministry, the reason for arrest should be recorded in writing.
"In case of an arrest being made by additional director or assistant director, the prior written approval of the director SFIO shall be obtained," as per the notification.
The SFIO director would be the competent authority for all decisions pertaining to arrest.
The arrest of a person in connection with a government or a foreign company under investigation can be made by the SFIO only "with prior written approval of the central government".
Besides, such arrest should be intimated to the managing director or the person in-charge of the affairs of the government company.
In case the person arrested is the managing director or person in-charge of a government company, then the secretary of the administrative ministry concerned should be intimated by the arresting officer, the ministry said.