State tops corporate fraud chart

Mumbai: Corporate fraud in Maharashtra has jumped five times with the State accounting for over 50% of the total cases registered against companies across the country in the financial year 2017-18.

According to the figures released by the Serious Fraud Investigation Office (SFIO), the investigating agency working under the Ministry of Corporate Affair (MCA), 109 cases of fraud were registered until March, 2018. This accounts for over half — 209 cases — registered in all states under the Companies Act, 2013. The State reported 23 cases in 2016-17. The data was released by the MCA on March 28.

SFIO officials said the spike is because of two special drives undertaken over the last year against shell companies and benami properties.

“The central agencies have been targeting benami properties in Mumbai after the Central Board of Direct Taxes, last year, made changes to the Prohibition of Benami Property Transactions Act, 1988, to probe property deals worth ₹1 crore and more. The cases have been registered at the directive of the MCA under the Companies Act,” said an official in the department.

The MCA, last year, had announced cancellation and crackdown on nearly 1.6 lakh companies for non-filing of financial statements. All of this has had an impact on the cases registered in the state, the officials said.

The Maharashtra figure is worrying considering a recent Kroll Annual Global Fraud and Risk Report 2017-18, which revealed that fraud cases involving companies went up by 21% in India. The State is way ahead of the second highest Delhi, which reported 34 cases, followed by West Bengal and Uttrakhand. The SFIO recorded 575 cases over the last three years in all states.

The MCA recognises fraud as a substantive offence under the Companies Act, while prescribing stricter norms for corporate governance.

Among the measures, information communication technology, data analysis, and forensic studies have curbed fraud in companies.