Serious Fraud Investigation Office (SFIO) Of India Would Get More Powers

Serious fraud investigation office (SFIO) is a corporate fraud investigating body under the ministry of corporate affairs (MCA), India. SFIO has been seeking broader powers to carry out investigations abroad. Now the MCA is considering this proposal of SFIO that would allow it to trail funds abroad.

Lack of such powers has also been hampering SFIO’s investigations into the multi-crore Satyam fraud as the company has operations in other countries also. Set up in 2003, the government plans to give the SFIO more teeth in the new Companies Bill, which was tabled in Parliament last August.

A permanent cadre for the SFIO is also under consideration to ensure more stability to the body. Diversion of funds is a Companies Act violation, but when funds are hived off abroad it becomes a hawala transaction, and falls under the ambit of the Enforcement Directorate.

The proposals to give SFIO more teeth for investigation are mostly based on the recommendations of the V Vepa Kamesam Committee. Giving the SFIO powers to trail illegal money stashed away abroad is, however, not part of the committee's suggestions.

The eight-member committee had suggested that the SFIO be given exclusive jurisdiction to probe and prosecute entities involved in financial frauds, besides also probing cases related erring entities/individuals like chartered accountants and company secretaries.

The committee is of the opinion that power of search and seizure, and attachment should be entrusted with the SFIO as available with the Income Tax authorities, Customs, Enforcement Directorate etc.

It has also suggested that the SFIO be empowered to take up a case suo moto and even on a source-based information if a fraud has been committed. The committee has also called for the SFIO having flexibility to outsource the services of experts like chartered accountants, legal experts etc and officers joining the investigating agency on deputation be ensured protection of their existing pay and allowances.

UIDAI Served With Legal Notices Challenging Its Constitutionality

Aadhar project of India is managed by Nandan Nilekani led unique identification authority of India (UIDAI). It has always remained in controversies since it has been launched.

Neither Aadhar project nor UIDAI are governed by any legal framework and parliamentary oversight. Aadhar project and UIDAI are purely executive projects with no constitutional sanctity. In fact Aadhar project and UIDAI are operating in an “unconstitutional manner”. Even the Prime Minister of India, Dr. Manmohan Singh, has not given a serious thought to the Aadhar project and UIDAI.

Now legal notices have been served upon UIDAI questioning its credentials and constitutionality. The notices have asked the legal sanctity behind the process of acquiring biometric data of people to provide them the 12-digit UID number even before a law on UID comes into force.

The two legal notices issued to UIDAI chairman Nandan Nilekani on July 5 and July 6 also raise concerns over UID numbers invading the privacy of individuals as these are for multi-utility service use, and would force individuals to leave trails, allowing invasion of their privacy.

Mathew Thomas, general secretary, Citizens’ Action Forum, and V K Somashekhar, founder patron, Coordinated Action of Consumer and Voluntary Organisations of Karnataka (CACVOK), have separately issued legal notices to Nilekani on Tuesday and Wednesday through their respective advocates.

US Legal Workforce Act Of 2011 And E-Verification

The Legal Workforce Act of 2011 of US has been doing rounds these days. However, it has also raised many privacy and identity theft concerns as well. Privacy groups of US have been opposing the same as undesirable and a problematic law.

These privacy groups believe that storing highly sensitive information, including the biometric details, of the employee would cause many cyber security and identity theft issues.

The proposed Bill would force the employers to use the federal E-Verify system to vet new employees and to verify that new hires and current employees can legally work in the US.

All employers would be required to compare information supplied by current and prospective employees with information contained in Department of Homeland Security (DHS) and the Social Security Administration (SSA) databases. As part of the verification process, the Social Security number provided by new hires would be compared with the name on record.

The Bill also proposes a pilot biometric authentication program that would let employers fingerprint employees as part of the vetting process. The Bill calls for penalties of up to $25,000 per violation and imprisonment of at least one year for employers who refuse to use E-Verify.

In India as well the Aadhar project managed by unique identification authority of India (UIDAI) is facing similar problems. There is neither a legal framework supporting the Aadhar project of India nor Aadhar project is secure from physical thefts and cyber attacks.

Are International Cyber Security Initiatives Enough?

While going through a good article on cyber security, I was thinking is the cyber security initiatives at national and international levels enough?

The article has contended that cyber security at the international level is not upto the mark and there is an urgent need of bringing international harmonisation in this regard.

Even there is no international cyber law treaty and different countries are governed by different cyber laws. This at times creates jurisdictional problems.

Even at the national and international cyber security events no consensus has reached for formulating an international cyber security convention.

As far India is concerned, we have no cyber security policy in India and even the cyber security laws in India are missing.

I believe it is high time for India and international community to consider cyber security seriously. The sooner we adopt sound cyber security in India the better it would be for the larger interest of India.