Contrary to the government's announcement, the Serious Frauds Investigation Office to look into corporate frauds will have search and seizure powers.
Senior government officials told Business Standard, the office, to be set up in the department of company affairs, would have all the search and seizure powers available to the department under the Companies Act, 1956.
For other areas like income tax, the SFIO would have the search and seizure powers vested with the agency concerned, they said, adding that an officer in the ranks of the joint secretary or additional secretary would head the office.
After a Cabinet meeting last week, Information and Broadcasting Minister Sushma Swaraj had said the SFIO would have to use the services of other agencies to undertake search and seizure operations.
The Cabinet had also decided the office would not be authorised to initiate investigations suo motu, but could launch a probe only after the matter was referred to it by the department of company affairs.
The SFIO has been conceived as a multi-disciplinary body to investigate corporate white-collar frauds and will be set up under the existing legal framework.
It will investigate complex frauds having inter-departmental and multi-disciplinary ramifications, involving public interest in terms of monetary misappropriation or persons affected, and also when there is a possibility of investigations leading to an improvement in systems, laws or procedures.
The office will submit its investigation report to the department of company affairs, and the latter will prosecute for violations of the provisions of the Companies Act, 1956, while it will forward the report on violations of other provisions to the agencies concerned for appropriate action.
The SFIO can also draw upon the services of experts for investigating multi-disciplinary frauds and outsource investigations from outside agencies. Initially, it will have two regional offices for the northern and western region.
A committee of secretaries, headed by the Cabinet secretary, will also be set up to give general directions to the SFIO and screen appointments at emoluments outside the government pay-scale to attract the best manpower.
The committee will have secretaries from the departments of company affairs, revenue, expenditure and personnel as its members.