Biz & Economy

Meet The Forensic Team Behind Financial Crimes

We all are aware of the departments like CID (Crime Investigation Department), Anti-Terrorism wing that curb the increasing criminal activities in the country.  But when it comes to crimes concerning finance or economy, cases are handed over to special departments.

Let’s have a sneak peek into them:

1. CBI (Central Bureau of Investigation)
The CBI is an investigative agency that deals with the criminal activities in the country. It has a special economic wing which keeps the national economy immune by detecting economic crimes and corruption in the nation. The bureau deals with cases like bank frauds, financial frauds, large-scale smuggling, and so on. Some of past cases which were investigated by the CBI are Coal Scam, Vyapam Scam, 2G Spectrum and Bofors scam. Their investigation exposed many high profile politicians, ministers, and businessmen who were involved in the scams.

However, the latest case on the CBI’s plate is the Vijay Mallya debt crisis. When the ‘King of good times’ Vijay Mallya took a loan of Rs. 900 crores from IDBI bank and failed to repay it, it was CBI who entered the scene. It declared the loan as NPA (Non-performing Assets) and listed him as a wilful defaulter.

Vijay Mallya NPAs

2. ED (Enforcement Directorate)   

The ED is a law enforcement agency which is responsible for enforcing economic laws in the country. The two major laws it enforces are FEMA (Foreign Exchange Management Act) and PMLA (Prevention of Money Laundering Act). These acts mainly deal with issues like black money, money laundering, and hawala trade.
Not just criminals, the ED does not shy away from exposing celebs as well.  For instance, SRK was summoned for violating FEMA as his IPL team Kolkata Knight Riders allegedly sold their shares to Mauritius based company at lower price causing loss of 73 crores to the government.
At times ED and CBI also work together to crack important and complex cases. The duo has been investigating the Vijay Mallaya NPA’s case together. (Power of 2!)

Vijay Mallya CBI

3. SFIO (Serious Fraud Investigation Office)
It is a fraud-investigating agency that comes under the Ministry of Corporate Affairs. It has experts from various financial sectors. In coordination with the Income Tax Department and CBI, it prosecutes ‘white-collar frauds’.

In 2009, SFIO played a major part in solving the Satyam Computer Scam. This was a major corporate scandal committed by the owner Ramalinga Raju by tampering company’s accounts with more than Rs. 7,000 crores in the balance sheets.  Further, SFIO shook hands with CBI and ED to crack this case. As a result of this investigation, Raju and other accused were found guilty and sentenced to the jail.

4. Forensic Audit Team
It evaluates the financial information of an individual or a firm which can be used as evidence in the cases of frauds like theft, bribery, extortion, and other financial claims. Maintaining such records of information makes it easier to find the contradiction in financial statements of companies. For that reason, RBI has made the forensic auditing mandatory for a huge amount of bank loans to control the growing NPAs. With regard to this, forensic auditors found out a few companies which had applied for loans despite having high cash reserves and declared them as wilful defaulters.

5. CVC (Central Vigilance Commission)
When a fraud or a case involves corrupt government officials, action against them can be taken only after legit permission from the Government. For this purpose, the Government of India has set up CVC which is a body that addresses corruption cases of the government officials.

But however, it is only an advisory body which just ‘keeps a watch’ and does not carry out an investigation.
It’s defined as a public authority by RTI (Right to Information), which means it has to provide the information requested by citizens. So, when the Coal scam took place under UPA regime, the opposition party BJP approached the CVC asking for the probe of the scam which was later handed over to the CBI.

6. CEIB (Central Economic Intelligence Bureau)
The bureau keeps a watch on black economy and other economic offenses and also designs measures that are required to deal with economic crimes like tax evasion, smuggling and money laundering.

It also has the power to coordinate with various Indian as well as international investigative agencies. Brainstorming with various agencies helps in the in-depth analysis of the issue thereby taking suitable measures to resolve it.

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