Sucheta Dalal :MoCA asks SFIO to prosecute SHCIL Services
Sucheta Dalal

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MoCA asks SFIO to prosecute SHCIL Services  

May 7, 2010

The Ministry of Corporate Affairs (MoCA) has asked the Serious Fraud Investigation Office (SFIO) to initiate action against SHCIL Services Ltd in respect of violation of various provisions of the Companies Act, 1956. SHCIL Services is the broking arm of Stock Holding Corporation of India Ltd (SHCIL). SHCIL, originally set up as a depository, has been embroiled in a serious scandal that was being investigated by the Central Bureau of Investigation (CBI) and the SFIO.


Corporate affairs minister Salman Khurshid in a written reply to the Lok Sabha said that out of 22 cases, investigation reports in respect of two companies were submitted by SFIO. Necessary instructions for action in respect of violation of various provisions of the Companies Act, 1956, have been issued to SFIO, he added.


According to information available on the NIC server, SFIO has completed investigation of SHCIL Services and issued instructions to file prosecution against the company. The other company is Satyam Computer Services Ltd. The SFIO has submitted its report and issued instructions for filing prosecutions on pure company law violations against Satyam.


Between 2004 and 2009, the SFIO has filed prosecution proceedings in the matter of 32 companies against 632 accused, including individuals as well as companies.


SHCIL, the parent of SHCIL Services has been deeply mired in a controversy for its e-stamping project planned several years ago. Last November, the company announced a staggering cash dividend of 900%. According to informed sources, this entire dividend was the amount SHCIL earned by selling its 2% stake in the National Stock Exchange (NSE) for about Rs250 crore. (Read more  Moneylife Digital Team

-- Sucheta Dalal