Seeking to strengthen its corporate fraud probe agency SFIO, the government today proposed hiring of experts, consultants and other professionals on contractual basis to meet its human capital requirements.
Releasing the draft rules for provisions relating to ''inspection, inquiry and investigation'' under the new Companies Act, 2013, the Corporate Affairs Ministry also said that the service conditions for such persons would be governed by the applicable recruitment rules of the central government.
As per the Act which got notified recently, the SFIO needs to be headed by a Director and consist of experts from areas like banking, corporate affairs, taxation, forensic audit, capital market, information technology, law or “such other fields as may be prescribed”.
Giving of “such further fields”, the Ministry today said that the “Central Government may appoint persons having expertise in the fields of investigations, cyber forensic, financial accounting, management accounting, cost accounting and any other fields as may be necessary for the efficient discharge of Serious Fraud Investigation Office (SFIO)”.
The draft rules further said that the government “may appoint experts or consultants or other professionals or professional firms on contractual basis as per the Scheme of engagement of Experts or Consultants laid down in the General Financial Rules of the Government of India”.
The terms and conditions of appointment of Director would be governed by the deputation rules under the Central Staffing Scheme of Government of India.
Besides, the terms and conditions of service of experts from Central or State or Union Territory (UT) Government, Public Sector Undertaking (PSU), Autonomous Bodies and other such organisations would be as per the applicable Recruitment Rules of the government.
Proposing the framework under which an SFIO officer can arrest a person suspected of wrongdoing, the Ministry said that a copy of the arrest memo, along with necessary material and document, would need to be sent to the office of the Director “latest by the next working day through the quickest possible means including a special messenger or by way of secured electronic means, if required”.
“An Arrest register shall be maintained at every office of the SFIO for the purposes of this rule and the Arresting Officer shall ensure that necessary entries are made in the Arrest register,” the Ministry said.
A similar Arrest Register would need to be maintained at the office of the SFIO Director as well.For investigations, the SFIO would need to follow the “procedure contained in the ''Manual of Investigation'' duly approved by the Central Government”.
The Act also provides for an SFIO probe to be conducted on the basis of complaint filed by a certain group of persons or a company, after payment of a security amount of up to Rs 25,000 for payment of the costs and expenses of investigation.
This security would be refunded to the applicant if the investigation results in prosecution.
The security amount would be Rs 10,000 if the applicant has a turnover of up to Rs 50 crore, while the security would be Rs 15,000 for turnover between Rs 50-200 crore, and Rs 25,000 for turnover exceeding Rs 200 crore.