SFIO is highly understaffed with more than 50% of posts lying vacant

A manpower crunch has hit the Serious Fraud Investigation Office (SFIO), with more than half the posts in the organisation yet to be filled.
 
The numbers suggest that the SFIO is highly understaffed with more than 50 per cent of the posts lying vacant. Of the 133 posts in different categories in the SFIO, 69 are vacant.
 
Recently the Centre referred 19 cases to the SFIO, but insiders say it would be difficult to wrap up the cases in time because there are not enough people to investigate them.
 
While 75 posts have been sanctioned for recruitment on deputation, only 25 are in place, while the remaining 50 remain vacant.
 
The SFIO is investigating high-profile cases such as those concerning Nirav Modi and Mehul Choksi, who are alleged to have defrauded Punjab National Bank.
 
It had also summoned ICICI Bank chief executive officer (CEO) Chanda Kochhar and Axis Bank managing director and CEO Shikha Sharma. The agency is also probing alleged financial irregularities by Ruchi Soya, Sterling Biotech and Kanishk Gold.
 
Meanwhile, the SFIO has been given more teeth with the powers to arrest.
 
The ministry of corporate affairs has approached the Union Public Service Commission to fill 10 more posts.
 
It had also sought additional funding from the ministry of finance in the form of ‘investigation allowance’. This allows the corporate affairs ministry to invite officials from other ministries to help investigate cases.
 
However, this provision was scrapped by the Seventh Pay Commission, which stated that those on deputation were already eligible for the deputation allowance.
 
The government data suggests that over the four years from 2014-15 to 31 January, 2018, 73 cases of investigation of 447 companies were assigned to the SFIO. Of those, while only 31 cases have been resolved and completed so far, the average time taken for successful prosecution or conviction is stated to be about 62 months per case.

 
The time taken is higher than in the previous years. For instance, it took, on average, almost 51 months for a case registered in 2014-15, and 36 months in 2015-16. There has been successful prosecution of the guilty in as many as 42 per cent of cases.
 
Experts attribute the shortage of staff in the SFIO to lack of candidates with technical expertise in investigating company frauds. They say attempts were made to recruit experts for the Office.
 
Ashish Bhan, partner at Trilegal, says the importance of the SFIO has increased with white-collar crimes rising in the last four years. “With an increase in company frauds and shell companies being detected, the SFIO is becoming an important body. As pressure mounts on the body, the government will be left with no choice but to recruit full-time professionals,” says Bhan.
 
He adds that while the registrar of companies will help detect companies that show unusual activity, the onus will fall on the SFIO to investigate them.
 
The SFIO was set up in January 2003 on the recommendations of the Naresh Chandra Committee on corporate governance.