Special Report | SFIO Tightens Grip on Corporate Fraud Across Maharashtra, Karnataka, Madhya Pradesh and Beyond

New Delhi | Maharashtra, Karnataka, Madhya Pradesh, Telangana, Delhi-NCR:
India’s corporate enforcement landscape is witnessing a decisive shift as the Serious Fraud Investigation Office (SFIO) intensifies action against companies and individuals accused of serious financial and corporate misconduct across key states including Maharashtra, Karnataka, Madhya Pradesh, Telangana, and the Delhi-NCR region. Acting under the Companies Act, 2013 and guided by recent judicial pronouncements, SFIO has significantly widened the scope and pace of its investigations, marking a coordinated nationwide push against large-scale corporate fraud.

The renewed push follows clear directions from the Supreme Court of India, which reaffirmed SFIO’s central role in investigating and prosecuting corporate fraud, ensuring that proceedings remain specialized, centralized, and legally robust.

Widening Investigation Footprint

According to senior officials, SFIO is currently probing a wide range of cases involving alleged fund diversion, shell companies, falsification of accounts, related-party transactions, and violations of corporate governance norms. Several investigations stem from inspections ordered by the Ministry of Corporate Affairs, while others arise from inter-agency intelligence and court directions.

States such as Maharashtra and Karnataka continue to account for a significant share of complex, multi-entity fraud cases, particularly in sectors like infrastructure, real estate, fintech, and manufacturing.

Coordinated Action by Specialized Agencies

In line with evolving enforcement strategy, SFIO is working closely with other specialized agencies, including the Enforcement Directorate, Income Tax Department, and Registrar of Companies (RoC). This coordination is aimed at avoiding duplication of effort while ensuring that criminal, civil, and regulatory violations are addressed in parallel.

Recent guidance allows non-high-profile or peripheral cases to be transferred to other competent agencies where appropriate, enabling SFIO to concentrate resources on large-scale and systemic frauds with wider economic impact.

Proclaimed Offenders Under Scrutiny

A notable trend in recent months has been the firm judicial stance against individuals declared as proclaimed offenders. High Courts have consistently denied interim relief in such cases, reinforcing that evasion of legal process will not dilute liability. SFIO investigations involving absconding directors and key managerial personnel have been fast-tracked, with Special Courts taking cognizance strictly in accordance with statutory provisions.

Streamlined Complaint Resolution

SFIO has also refined its complaint resolution and prosecution guidelines, following judicial observations. Complaints under Section 212 of the Companies Act are now being scrutinized more rigorously before filing, ensuring that only well-documented and investigation-backed cases reach Special Courts. This move is expected to strengthen conviction rates and reduce procedural challenges.

Recent Developments

In early 2026, SFIO reportedly finalized multiple investigation reports and filed complaints before designated Special Courts in cases involving alleged diversion of hundreds of crores of rupees. The Ministry of Corporate Affairs has directed faster completion of pending inspection reports, signaling zero tolerance for delays in high-stakes corporate fraud matters.

Message to Corporate India

The ongoing crackdown sends a clear message: corporate fraud will be met with swift, specialized, and coordinated enforcement. With SFIO at the center, supported by specialized agencies and reinforced by judicial clarity, India’s corporate governance framework is entering a phase of stricter accountability and heightened compliance expectations.

As investigations deepen and prosecutions advance, the coming months are expected to be critical for several companies and promoters facing serious fraud allegations across the country.