The Hindu : JPC for separate body to probe serious financial frauds

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Friday, Dec 20, 2002

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JPC for separate body to probe serious financial frauds

By Our Special Correspondent

NEW DELHI Dec. 19. The Joint Parliamentary Committee which probed the stock market scam has recommended setting up of a separate body to investigate incidents of serious financial frauds and favoured a suitable legislation for it.

In its report to Parliament today, the JPC agreed with the thinking of the Government to have a separate "Serious Fraud Office'' on the lines of the one in the United Kingdom. It observed that owing to the involvement of the Central Bureau of Investigation (CBI) in multifarious activities, it would be prudent to have a separate multi-faculty investigation institution to deal with financial frauds.

While favouring sweeping jurisdictional powers of such a multi-faculty probe agency, the Committee felt that the proposed body should not be limited to conducting investigation against the employees of the Central Government and Public Sector Undertakings but should be comprehensive, covering offences committed even by the employees of the State Governments and organisations as well as those in the private sector.

The Committee found that human resource constraint was a perennial problem in the CBI, as during the course of the inquiry of the earlier JPC also, the same problem was spelt out. The Committee expressed concern that the situation had not improved even after almost a decade. "At present, about 50 per cent vacancies exist in the CBI, including its Economic Offences Wing (EOW), which is a crucial arm of the investigative agency.'' Though it is imperative that a premier investigative agency like the CBI should not be allowed to remain incapacitated for want of both men and material, the CBI, being basically a police organisation, was not fully equipped with competent and qualified personnel for investigating into intricate financial matters.

"This handicap has also been expressed quite explicitly by the CBI before the Committee. Taking into account the new technological innovations where electronic modes are likely to be adopted for undertaking various types of financial transactions, it is imperative that persons investigating economic offences are fully qualified and trained to handle the complex and diverse nature of transactions with a sense of competence and necessary acumen,'' it observed.

The Committee noted that out of 72 cases registered by the CBI in the 1992 securities scam, 42 were chargesheeted, of which only six cases could be disposed of and the rest were still pending trial. One of the reasons for the delay is that initially only one special court was set up and later four more courts were set up but only two of them remained functional.

"It is really shocking that the situation remains the same even as on date. The Committee desires that this aspect needs to be taken up and resolved with a sense of urgency so as to ensure that the laws are ultimately implemented effectively and the guilty punished in an expeditious manner,'' the JPC said.

Taking serious note of the snail's pace at which the CBI has carried on with the investigations into the Cyberspace Infosys Limited in which the company's chief, Arvind Johari, and some senior Unit Trust of India officials were allegedly involved, the Committee said the CBI must make an earnest effort to complete the investigation without further loss of time.

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