History of SFIO
The Government of India had set up a Committee on Corporate Governance under the Chairmanship of Shri Naresh Chandra, former Cabinet Secretary.
The Naresh Chandra Committee inter-alia recommended setting up of Corporate Serious Fraud Office.
The recommendations of Naresh Chandra Committee were as under:-
i) A Corporate Serious Fraud Office should be set up in the Department of Company Affairs with
specialists inducted on the basis of transfer/deputation and on special term contracts.
ii) This should be in the form of a multi-disciplinary team that not only uncovers the fraud,
but able to direct and supervise prosecutions under various economic legislations through
iii) There should be a Task Force constituted for each case under a designated team leader
iv) In the interest of adequate control and efficiency, a Committee each, headed by the
Cabinet Secretary should directly oversee the appointments to, and functioning of this
office, and coordinate the work of concerned departments and agencies.
v) Later, a legislative framework, along with the lines of the SFO in the UK, should be set up
to enable the CSFO to investigate all aspects of the fraud, and direct the prosecution in
2. Consequent to the recommendation of Naresh Chandra Committee and in the backdrop of
stock market scams as also the failure of non-banking companies resulting in huge financial
loss to the public, the Cabinet in its meeting held on 9th January, 2003, decided to set up a
Serious Fraud Investigation Office (SFIO).
3. As per the decisions of the Cabinet, the Central Government issued a resolution on 2nd
July, 2003 constituting this organisation. In continuation of the aforesaid Resolution,
charter of Serious Fraud Investigation Office was issued by the Government on 21st of
August, 2003 which inter alia stated that the responsibilities and functions of the SFIO will
include, but not be limited to the following:-
a) The SFIO is expected to be a multi-disciplinary organisation consisting of experts in the
field of accountancy, forensic auditing, law, information technology, investigation,
company law, capital market and taxation for detecting and prosecuting or recommending for prosecution white collar crimes/frauds.
b) The SFIO will normally take up for investigation only such cases, which are characterized by –
i) complexity and having inter-departmental and multi- disciplinary ramifications;
ii) substantial involvement of public interest to be judged by size, either in terms of monetary
iii) the possibility of investigation leading to or contributing towards a clear improvement in systems,
laws or procedures.
c) The SFIO shall investigate serious cases of fraud received from Department of Company Affairs.
SFIO may also take up cases on its own, subject to para (d) below.
The SFIO would make investigations under the provisions of the Companies Act,
1956 and would also forward the investigated reports on violations of the provisions
of other acts to the concerned agencies for prosecution/appropriate action.
d) Whether or not an investigation should be taken up by the SFIO would be decided
by the Director, SFIO who will be expected to record the reasons in writing.
These decisions will be further subject to review by a coordination committee.
4. With a view to review the functioning of the SFIO and to make it more effective, the Central Government
constituted an Expert Committee under the Chairmanship of Shri VepaKamesam formerly Deputy Governor,
Reserve Bank of India. The committee deliberated upon various issues relating to
investigation of corporate fraud, based on the experience of SFIO and the recent
developments in India and global arena. In its report dated 29th April, 2009,
the committee gave various recommendations to suggest statutory, administrative
and organizational changes for improving the effectiveness and to ensure efficient
discharge of duties by SFIO. The committee had carefully considered views and opinions
of different regulatory and investigative agencies and gave its recommendations to the
Ministry in developing its proposals for legislative changes and institutional development
towards dealing with corporate fraud effectively and also making SFIO an effective
investigative and law enforcement agency.
5. As per the Companies Act, 2013 , Serious Fraud Investigation Office (SFIO) has been established
through the Government of India vide Notification NO. S.O.2005(E) dated 21.07.2015.
It is a multi-disciplinary organisation under the Ministry of Corporate Affairs,
consisting of experts in the field of accountancy, forensic auditing, banking,
law, information technology, investigation, company law, capital market and taxation
etc. for detecting and prosecuting or recommending for prosecution white collar
6. Investigation into the affairs of a company is assigned to SFIO,
where Government is of the opinion that it is necessary to
investigate into the affairs of a company –
(a) on receipt of a report of the Registrar or inspector under
section 208 of the Companies Act, 2013;
(b) on intimation of a special resolution passed by a company that
its affairs are required to be investigated;
(c) in the public interest; or
(d) on request from any department of the Central Government or
a State Government
7. SFIO is headed by a Director as Head of Department in the rank of
Joint Secretary to the Government of India.
The Director is assisted by Additional Directors, Joint Directors,
Deputy Directors, Senior Assistant Directors, Assistant Directors
Prosecutors and other secretarial staff.
The Headquarter of SFIO is at New Delhi, with five Regional Offices
at Mumbai, New Delhi, Chennai, Hyderabad & Kolkata