role, powers functions of sfio icsi seminar · ¾prize chits & money circulation schemes...
TRANSCRIPT
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Role, Powers&
Functions of SFIO
ICSI Seminar28‐12‐13
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Opening Remarks
SFIO then……
SFIO now!
Challenges Ahead
Concluding Remarks
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We are neighbors now!
Secretarial Audit mandatory for certain class of companiesSecretarial Report forming part of Board Report
BOD need to explain Qualifications & Observations
Company Secretary in practice responsible for ensuring compliance to “Secretarial Standards”
Liable for punishment in case of default
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Landing up in Eighth circle of Hell
Get a Pillion-ride on Geryon
May not have company of Virgil
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Established through an Executive order
Having a Multi-disciplinary Team
Investigation only under reference u/s 235 & 237 of Companies Act
Market Research & Analysis Unit
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A multi-disciplinary organization under Ministry of Corporate Affairs
Having experts in the field of accountancy, forensic auditing, law, information technology, investigation, company law, banking, capital market and taxation.
For detecting and prosecuting or recommending for prosecution white-collar crimes/frauds.
Takes up for investigation only such cases, which are characterized by complexity and having inter-departmental and multi-disciplinary ramifications
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Substantial involvement of public interest to be judged by size, either in terms of monetary misappropriation or in terms of persons affected
Possibility of investigation leading to or contributing towards a clear improvement in systems, laws or procedures.
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A statutory organization created u/s 211
Fraud defined for the first time in explanation to 447
Additional powers conferred under new Act under Chapter IVX
Provision for Special Court u/s 435
Enhanced punishment for Fraud u/s 447
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Regulatory landscape: Multiple legislations
Overlapping Jurisdiction of Central Agencies due to camouflaging device adopted by Companies
Regulators suffer from “Pahle Aap Syndrome!
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Prize Chits & Money Circulation Schemes (Banning) Act, 1978: Protection of Interest of Depositors Act
Provisions relating to Acceptance of Deposits u/s 58A of Companies Act 1956: MCA
Collective Investment Scheme 1999:SEBI
Listing of Securities: SEBIRBI Act
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Claims to be covered by exception in rule 2(b) clause (vi)"deposit" means any deposit of money with, and includes any amount borrowed by a company but does not include –(vi) any amount received by way of security or as an advance from any purchasing agent, selling agent, or other agents in the course of or for the purposes of the business of the company or any advance received against orders for the supply of goods or properties or for the rendering of any service
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Substantial time gap between initial detection and taking up case for detailed investigation
Fraudsters always ahead of Regulators
Absence of coordination between various agencies when multiple agencies involved in investigation
Focus on detection than Prediction
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White Collar crime vs. Street Crime
De-jure & De-facto protection
Time to break Silos
Bringing in Professionalism
Need for developing prediction capabilities
Corporate Governance: best disinfectant
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Crime committed by person of respectability & high social status in the course of his occupationWhite-collar crimes are less violent & executed without a physical force Have a colossal injury: Loss of Trust
Street crime are sudden and accidental in nature without any defined occupational base
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“It takes a crook to catch a crook”
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Thank you