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THE ANATOMY OF CORPORATE FRAUD: GOVERNANCE TO ACCOUNTABILITY INSIGHTS FROM INDIA
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THE ANATOMY OF CORPORATE FRAUD: GOVERNANCE
TO ACCOUNTABILITY INSIGHTS FROM INDIA
AUTHORED BY - SATYAM GOYAL & NIKITA SINGH
“Corporate Governance is to be
intellectually honest which requires a mindset change as it is about outcomes,
ethics, value-creation, effective control and legitimacy and not just sticking
to rules and regulations".
Introduction
The high economic growth with
plethora of opportunities has to be in tune with the corporate ethics to stir
up the good corporate governance as high opportunities creates high potential
to expand business markets backed by corporate evils such as fraud, bribery,
corruption, misappropriation[1].
The corporate ethics & governance in complex dynamic economy like India has
a history of comprehensive, rigorous, efficient and dicey law to deal with the
corporate scams and scandals that have been sticked to Indian Economy from the
British Era as an old hill such as The East India Company Fraud where
Alexander Fordyce shorted (i.e., he bet on the price falling) East India
Company share, and when the shares instead started to rise, he took money from
his bank to cover losses, initially dipping into past profits, but later taking
depositors’ money too. The corporate scandals and scams have been on a rise in
the present times affecting the corporate market economics as a sub part of the
larger market economics. The Companies Act, 2013, The Competition Act
2002, The Prevention of Money Laundering Act, 2002, etc. have
addressed the various practical concerns of corporate evils by enabling a
flexible, transparent, self-regulatory and unambiguous mechanism with the
necessary substantive amendments allowing self-compliance to the corporate
entities ensuring sound corporate governance practices.
Corporate Risk: Navigating
Cosmopolitan Fraud
The corporate evils require a
positive perspective, wherein bribery is defined as the act of offering,
providing, or receiving anything of value with the intention of inducing or
rewarding someone for acting, and corruption is defined as dishonest or
fraudulent behavior by those in positions of power, usually involving bribery
and both bribery and corruption are included under an umbrella term
"fraud," which means deliberate inducement, an act of deceit, or
fraudulent behavior (one that is not what it seems or is represented to be) in
order to obtain a financial advantage over others in terms of money or property
belonging to an individual or an organization.
The term ‘fraud’ is regulated differently
in different interpretations under contract law (subsidiary of corporate law) and
corporate law, where the history of ‘fraud’ under Indian law can be traced back
to the period of enforcement of Indian Contract Act,1872 by Imperial
Legislative Council where under sec.17 of ICA,1872 ‘Fraud’ is defined as –
“Fraud” is defined as any of the following
actions taken by a party to a contract, with his consent, or by his agent with
the purpose of misleading another party concerning his agent or persuading him
to sign the contract[2]: —
1) the assertion that something is false
as a fact by someone who does not think it to be true
2) the act of consciously not informing
someone or withholding information someone should know or believe to be valid
3) a promise made with no intention of
executing it
4) any other action which can be
performed to cause a deception
5) any act or omission of a particular
character attributed by the law as fraudulent
Explanation. — It is not fraud to
simply remain silent on facts that could influence someone's desire to sign a
contract, unless the situation is such that the person who is silent has an
obligation to speak or unless his silence is equivalent to speaking in and of
itself.
According to Indian Contract Act,1872
fraud is constituted when any of the above stated essential is fulfilled and there
is an intent to deceive, which results in ‘wrongful gain’ to the person
committing the fraud.
The act of ‘fraud’ under the
corporate law is considered as a penal offence punishable with fine,
imprisonment, or both and this specific act of fraud for corporate governance
is exclusively dealt with The Companies Act,2013 where it’s not a new
addition to the legal framework rather it has been concept that has been dealt
with The Companies Act,1956 with a pinch of ambiguity and lack of clearer
awareness of the economic dynamics where there have been no proper definition
of the term fraud provided but the act provides for a specific term ‘person’ for
the fraud providing it a wide leverage as it includes any individual who have
been in a connection with the affairs of the company be it be directors,
employees, officers, senior level management, lower level management, chiefs of
the company who are engaged in the day-to-day administration of the corporate
organization falls within the ambit of fraud. The Companies Act of 1956 also
provides for a scattered and different penal punishment for different kinds of fraudulent
activities such as it provides for 5 years of imprisonment or fine or both when
a person fraudulently induces persons to invest money in a company, it also
provides for 7 years of an imprisonment to a person who is found guilty of falsifying
books during the course of winding up, in addition to it there is an
imprisonment for 2 and fine for fraud by officers, there is provision for the Central
Government to seek direction from the court against the person or person’s whom
they are of opinion are connected to conduct and management of the company is
guilty of fraud and many other instances and provisions for fraud.
The Companies Act, 2013 gives us a newer
insight of fraud through proper, clear and unambiguous definition of the
term fraud and a synthesised and amalgamated imprisonment for different acts
and types of fraud, under section.477 of The Companies Act, 2013 –
Explanation—For the purposes of this section:
-
In the context of the operations of a
corporation, "FRAUD" includes any act, omission, concealment or
cover-up of a material fact, and an act or omission, including a failure to
disclose upon request, committing an act of dishonesty, that is to say, conduct
which falls short of honesty in relation to a person's position or functions,
which is designed to: create in a person's mind an impression about something
done or not done, or about a position in which that person is, or is not, that
is false and either is known to be false or is not believed by the person to be
true; obtain an advantage or benefit, or cause a loss, to any person.
This clearer definition of fraud
resembles those with a pinch of a definition of fraud under the Indian Contract
Act,1872 where both the law provides that an act is considered fraud when there
is a presence of mens rea i.e. the 'intent to deceive' where if any act,
omission, concealment of fact is performed without the intention to deceive
such an act, omission, or concealment of fact is not to be considered as fraud.
Though, The Indian Contract Act,1872 and The Companies Act,2013 resembles a
pinch in terms of defining the fraud still there exist a fundamental difference
between the two where The Indian Contract Act,1872 is a civil law only
providing for compensation or reimbursement whereas, The Companies Act,2013 is
a criminal law providing for the penal punishment (imprisonment, fines or both
imprisonment and fine) in case of any fraud in relation to the corporate
affairs.
The section 447 of the Companies Act,
2013 states “Without prejudice to any liability to repay any amount under this
Act or any other law for the time being in force, whoever is found to have
committed fraud shall be punishable with imprisonment not less than six months
but may extend up to ten years and shall also be liable to fine not less than
the amount involved in the fraud but which may also exceed three times the
amount of such fraud.” [3]It
may be noted that sections 447 to 453 of the act categorically describe
potentially different case and situation where this criminal penalty
is to be imposed. Further, differently to the general provision
on the penalty, this provision also leaves the upper bracket of the penalty at
10 years and the lower bracket at 3 years instead of half a year where the
fraudulent activity might have consequences for the public interest. Moreover,
the Act provides that fraudulent statements will attract penalties as under
section 448, while fabricated evidence will be penalized as under section 449.
Section 450 has not prescribed any specific penalties or fines, whereas the
repeated offenses will be dealt with as under section 451. The wrongful holding
of property will attract penalties as provided in section 452, and the improper
use of words "limited" or "private limited" will attract
penalties as under section 453.
The section 454 of the Companies Act,
2013 provides for 'adjudication of penalties'. The section elaborates the role
of 'The Central Government' for the selection of an adjudicating officer which
shall be a rank not below 'Registrar'[4].
The section further clarifies the duties of the adjudicating officer and
'Regional Director'. The section describes the selection process of an
adjudicating officer to be from The Central Government and such an officer
shall hold rank as ‘Registrar’ or above. It goes further on to define the roles
of the ‘adjudicating officer’ and the ‘Regional Director’. The amount of
penalty imposed has to be remitted by the companies within ninety days from the
receipt of a copy of the order; if they fail to do so, they will receive a fine
which can stretch from twenty-five thousand rupees to five lakh rupees. An
official position holder of a company which has defaulted and failed to pay the
penalty within ninety days from the receipt of a copy of the order is liable
for imprisonment for such term not below six months, or fine which shall not be
less than twenty-five thousand rupees but may extend up to one lakh rupees, or
with both as per the concerned subclause (2) of clause (8) of section 454 of
this act.
Deceptive Evil: Insights & Systematic
Vulnerabilities
The Indian Economy is grappling with a
significant rise in corporate frauds in recent times as highlighted by PwC’s Global
Economic Crime Survey 2024 – India Outlook: that there has been 7% increase
in the corporate frauds in India as compared to the results of 2022 edition of
the same survey wherein, the current surveys show that 59% of Indian
organisations faced financial or economic fraud in the past 24 months. The
condition of white-collar crimes, or corporate fraud, in India has deteriorated
to such an extent that the 59% reported in the PwC survey exceeds the global
average of 41% by 18%[5]. The
corporate frauds have serious implications on the administration, reputation, employee
morale, its stakeholders and the related beneficiaries of the corporate
organization and according to The Report of the Nation’s 2016 global Fraud
Survey an organization faces deficit in their revenue generation by 5% as a
result of fraud reflecting another serious implication on the revenue of the
organization as well. The corporate fraud is amenable to the fraudster(s) resulting
in an economic gain to him/her by deliberately changing the information of the
organization to grace its position and presence in the market, by deliberately
engaged in embezzlement, corruption or in false claims of expense in relation
to the organization with his connivance. The corporate fraud as a villainous and
a deliberative deception to the stakeholders, investors, public, resulting in a
ripple effect to the economic growth of the country as it lower downs the trust
of the individual to invest resulting in a great financial loss not only to the
corporate organization but to the country’s financial system as well.
Traditionally, even with an effective
mechanism to curb corporate evils certain loopholes [6]still
exists that paves a way of motivation to the fraudster to commit fraud where
these gaps exist in varied forms, the very first loopholes exist in the form of
human inherent enemies such as greed or desire of financial gain and
manipulation to build own presence. The systematic vulnerabilities in a
corporate organization may exist from a lower-level management followed by
middle-level management and the apex body of higher-level management ad
requires a deeper understanding of specific areas where it may exist –
(1) Inadequacies in nomination and
appointment of board members can bring loopholes within an organization especially
when board men nominate or appoint friends, relatives or acquaintances instead
of independent experts in their respective fields.
(2) Fraternal human resource gaps, often
in finance, corporate governance, and special sector expertise, generate elasticity
in any organization. The lack of such expertise is likely to generate avoidable
inefficiencies while these inefficiencies could easily spill over to issues
such as the reliability of the company’s financial statements and the ability
to monitor employees.
(3) Ineffective audits stem from
ineffective audit assessment methods that use vouching and casting techniques
and have only the minimum of necessary knowledge about the financial
instruments, derivatives, and off-balance sheet transactions that open vast
loopholes in the organization.
(4)
Lack of
effective internal communication and lack of proper separations of duty are
some of the shortcomings within an organization, majorly because they produce
an incorrect risk reporting which creates an environment for fraud and
mistakes.
(5) Weak or low fines and penalties
within the legal structure provide ways through which corporate fraud happens.
This position may result to
fraudulent activities because, people may feel there are no repercussions
to such actions.
The, emergence of the technology has
created a sudden shift in the traditional method of working, administering,
governing, auditing post pandemic creating a new set of organizational
challenges and where this effect of technology has created a significant gamut
of substantial risk from emerging fraud such as digital data breaches, digital
server hackings, data entry frauds, botnet attacks, cyber-crime, phishing, IP counterfeiting
and piracy, business email compromises, malware, identify theft, voice cloning,
etc. requiring a new strategic, holistic and comprehensive move in the form of
employees awareness training, robust system of fraud management, effective
cybersecurity measures, in house sessions on emerging frauds, knowledgeable
sessions on ethical code of conduct to employees and other related
beneficiaries to curb the emerging
vulnerabilities of sophisticated fraud schemes. According to the 2024 AI,
Fraud, and Financial Crime Survey by Bio Catch, 69% of corporate banking
organizations said that criminals are more skilled at using AI for financial
crime than banks are at using it to combat financial crime, the same survey
also shows that 69% of the organizations think that a robust and comprehensive
use of AI will result in more revenue from improved customer interactions, less
time spent looking into false positives, etc., than loss from fraud, breaches,
etc[7].
Unmasking Corporate Malfeasance:
Scandals and Personas
The words of François Valérian,
Chair of Transparency International sound like a sitting duck in the modern
fraud landscape which is beset with stratagems of all sorts ‘Corruption will
never cease to exist until the systems of justice have the ability to penalize,
as well as restrain, the governments’
Corporate Fraud can be classified as
–
The classification of corporate fraud
may depend upon the nature of business a corporate organization is engaged
with, though these frauds can be classified into certain broader areas such as[8]: -
1. Fraudulent Financial Accounts or
Audits – consists
of providing false information about the company to the investors,
stakeholders, customers, employees of the organization regarding and distorting
the actual position and figures in the balance sheets/ profits and losses of
the company such as over stating the revenue, improper estimate of assets,
other credits and expenses, high sales, high growth rate in future and so on
and cheating the third party through audit.
2. Round Trip Transactions &
Fraudulent Disbursements – involves recording those transactions which have occurred
between two companies where no economic or business purpose exist to reflect
inflated sales growth of the company where sales between the company exist for
a same amount in smaller period of time or a loan or an investment in a
customer such that they may have purchasing capacity where these transactions may
include schemes of billing, payroll, theft of company checks, ghost or alien employee,
and expense reimbursement transactions.
3. Money Laundering - is a criminal offence involving a
process of enjoying the profits or wealth by concealing the source or origin
off the illicit gain being hidden from the preview of tax authorities, where
the illicit profit may come from insider trading (trading in company’s stocks
or securities by persons who are predicted to gain access to the subtle
information in respect to such securities), bribery (involves offering,
giving or receiving anything that influences an official act), embezzlement (taking
funds or assets entrusted to them and using them for purposes other than those
for which they were intended), etc. by altering the source, concealing the
beneficiary's identity, or moving the funds to a less desirable location.
4. Procurement Fraud – involves a manipulation fraud
where a customer is contacted for exchange of the goods above the price
prevailing in the market for shipping of the funds to enjoy numerous kickbacks
in the form of material goods, cash, etc. where this manipulation can happen
even after the goods has been supplied to the vendor in the form of delivering
the shabby, damaged, scruffy, dilapidated good to obtain an unfair advantage
over other. Additionally, this process of manipulation may exist even during
the bidding process of the contract to the contractor(s) with special
advantages or either by creating shell companies.
5. Misappropriation of Assets – is the most common form of
corporate fraud, which involves the stealing of assets of the corporate
organization or the misuse of just to the organization for the personal gain or
advantage performed by directors, employees or any other individual involved in
the affairs of the company, through mastery over the mind of the victim through
tricks or insidious approaches into making the fraudster get a hold of the
assets such as showing fake inventory or fabricated sales,
fake credit notes.
The fact that the Indian Economy
faces the issue of corporate fraud from the pre-independent era is undeniable,
according to Indian Economist Usha Patnaik in her research in 2018 in Columbia
University Press she reported and calculated that Britain drained a nearly
total of $45Trillion from India during the period of 1765 to 1938 which is 17
times greater than the total annual gross domestic product of the United
Kingdom today[9]. The
modus operandi of the stealing under East India Company in 1765 as reported by
her was such that, The Company after initial control over the Indian
sub-continent started collecting tax from the Indian’s and used one-third part
of the tax revenue very cannily in buying the Indian goods for British use where,
in this way the Indian goods to the Britishers cost free, in other words under
this scandals the Indians manufactured their goods with their own cost and also
indirectly pays for their own manufactured goods in the form of tax which she
reported as ‘scam – theft on a grand scale’. In 1847, another example of this
was the "twist to the tax-and-buy system," which required special
Council Bills (a special paper currency issued by the British Crown) if any
country wanted to purchase Indian goods. The only way to obtain these bills was
to pay London in gold or silver, and the traders would then use them to pay
Indian producers. When the Indians cashed these bills at local offices, they
were paid in cash from the tax money collected from them. In this way, the
Indians were defrauded once more.
The Corruption Perception Index
by Transparency International shows, position of India has fallen from Rank 85
(with a score of 40 out of 100) in 2022 to Rank 93 (with a score of 39 out of
100) in 2023, reflecting the number of financial irregularities in India in
recent past has increased which is a timely reminder against the growing
systematic vulnerabilities and the easiness of committing white collar crimes
in the corporate sector. The list of scandals in India are numerous but some of
the notorious scandals or scams committed in India which have left the Indian
Economy and Indian Legal Framework with remarkable impact are[10] –
|
Sr. No
|
Perpetrator
|
Fraud [11]
|
Issue
|
|
1.
|
Harshad Mehta
|
Scam of 1992
|
Harshad Mehta is noted to have siphoned over Rs. 4,000 crores from the
banks which, according to the allegations, aided stock brokers in the
1991 to 1992 years.
|
|
2.
|
Abdul Karim
Telgi
|
Scam of 2003
|
Abdul Karim Telgi secured license from the
Indian government to prepare stamp papers and fraudulently printed stamp
papers of ?171.33 crore.
|
|
3.
|
Ramalinga Raju
|
Satyam Scam of 2009
|
Ramalinga Raju agreed that he had been faking his company books for
several years with grossing up the earnings and assets figures. The
fraud led to a near ?8,000 crore loss as the stock price crashed.
|
|
4.
|
Ketan Parekh
|
NH
Securities Scam of 2001
|
Ketan Parekh
is a stockbroker who fraudulently manipulated K-10 companies’ stock prices
with a help of manipulation cartel and got fund from banks and this gave rise
to ? 1,500 crore scam.
|
|
5.
|
Adarsh Housing Society
|
Adarsh Housing Society Scam of 2010
|
The Adarsh Housing Society, was intended to be constructed for the
widows of war and the veterans where politicians and bureaucrats grabbed the
chance to acquire flats at concessional rate thus exposing high
level of corruption.
|
|
6.
|
Suresh
Kalamadi, Sheila Dixit (Ex CM – Delhi)
|
Common Wealth
Games Scam of 2010
|
Out of the
?70,000 crore spent on the Commonwealth Games, only half was allocated to
Indian sportspersons. The Central Vigilance Commission found out acts of
corruption such as payments to non- existent parties, contract biases, wilful
delays in contracts, high quoted prices and equipment procurement frauds as
well as embezzlement of funds.
|
|
7.
|
Vijay Malya
|
Vijay Malya & Kingfisher Airlines Scam of 2016
|
Vijay Mallya, owner of Kingfisher Airlines, defaulted on ?9,000 crore
loans and fled to the UK. India seeks his extradition for financial crimes.
|
|
8.
|
Nirav Modi
|
PNB Nirav
Modi Scam of 2018
|
A ?10,000
crore scam was committed by Nirav Modi who obtained fake LoUs from the PNB to
obtain overseas credit which blown up when he defaulted
on his dues to PNB.
|
|
9.
|
Dinesh Dalmia
|
Dalmia Scam of 2006
|
Dalmia illegally profited ?595 crore through manipulations involving
DSQ Software shares.
|
Corporate
Fraud: Resolution Tactics
The continued rise in corporate
malpractices requires a sound legal environment and an uncompromising internal
control scrutiny policy. It is always important that such an approach cuts
across all levels of management so that each of the resolution tactics are put
in practice consistently across the organization with zero tolerance to bias or
discrimination courtesy of position or rank in the organization. Sophisticated
organizational loops can, in most occasions, be solved using basic but
innovative procedures. All the recommendations made herein are therefore in the
author’s opinion. The first of these should encompass the creation of an
ordinance at the workplace so that employees can report any malpractice
voluntarily without coercion, pressure, inducement, or retaliation. This
ordinance has to envisage the setting of efficient grievance processing which
can guarantee the reporting of any misconduct within 15-30 days of the
incident. Quite similarly, the grievance redressal procedure should be overseen
by an impartial committee of experts and professionals whose job is to
accumulate evidence and solve reported issues within an efficient timeframe of
5-10 days. In special circumstances the time frame can only be extended but not
to go beyond 20 days under any circumstances. The next move at the governmental
level could include passage of laws that would require the government to conduct
audits of every corporate organization for each financial year. To facilitate
this, the government may establish dedicated bodies: The Central
Corporate Audit Assessment & Vigilance Cell and The State Corporate Audit
Assessment & Vigilance Cell, modelled after the Comptroller and
Auditor General of India (CAG). These cells should comprise independent and
preferably, individuals with background in finance, accounting, auditors, and
best practices. At the central level, the cell would be headed by a committee
that will be including the President of India, the Chief Justice of India, the
Finance Secretary, the Principal Secretary and an Expert in finance, audits and
accounts to be nominated by the President of India. At state level, the similar
committee would comprise the Governor of state, Chief Justice of High Court,
Chief Secretary of the state and an Expert in finance, audits and accounts
nominated by the governor of state. These state bodies would be directly
accountable to the central committee straying out from any political
interference or even pressure. These cells would release precise and detailed
reports of their findings after carrying out their evaluations, tasks which
they would ideally do on an annual basis, to ensure that all parties involved
are held responsible for their actions.
The recommended resolution tactics in
this regard may include [12]–
1.
Current
nominating committees that operate based on the recommendation of the board of directors
or the CEO do not always make allowance for diversity and independence. Each
committee should be formed by appointing directors who possess the necessary
experience; the selection process should be clearly documented; the use of a
published skills matrix that allows for applications for membership and places
reliance on the rotation system that includes re-elections after term limits.
2. There should be an increase in the
stringencies of fines and penalties for corporate fraud and regulatory infractions,
as well as legal action against the executives and board of directors for
fraudulent actions especially in acknowledgment of cooperation efforts between
the regulatory agencies handling multinationals.
3.
There has to be an assignment of sufficient funds
to the supervisory authorities to improve the competencies of delivering the
right personnel, creating technologies, and three-hundred-and-sixty-degree
inspections of organizations in addition to placing emphasis on up the auditing
standards would make it easier to identify fraudulent activities currently
taking place. They need to make a positive input into improving the quality of
audits, inspection, enforcement and sanctions for the same.
4.
For assurance of ethical standards and combating of
wrong-doing, through adoption of secure and private employee report lines
including one to one and several reporting methods to make certain extensive
reporting procedures and rigid no-retribution procedures inclusive of
namelessness in reporting and outsider investigation for fairness in dealing
with alleged perpetrators.
5.
Apart from carrying out segregation of duties in
the organization, introduce a method of giving incompatible tasks to different
people to minimize the manipulation risks that prevail in the organization.
Continuously perform some supervision over control activities, transactions,
and financial statements with the help of information technologies. Also,
constant risks that involve assessing the firm’s vulnerability and strength to
avoid such risks in the future.
6.
Synchronizing accounting policies so as to bring
sanity in the complicated structures of financial instruments for enhanced
impeccable dimensions that are backed by the mandatory declaration of ESG to
both financial and firm non-financial performances to enhance comprehensiveness
of the latter with vigour of criminal charges against individuals who
perpetrate fraud with a view to assert individual accountability.
The
employment of the outlined above strategic resolution tactics will go a long
way in eradicating white-collar crimes hence achieving the principles of good
corporate governance amongst corporate organizations and government.
Corporate
Fraud: Wrapping Up the Tale of Deception and Reform
In summary, it is not surprising that
the problem of corporate fraud is observed deeply rooted in India where it
requires stringent corporate governance fabrics and non-relaxed regulatory
compliance. The past scenarios of corporate frauds combined with the
present-day issues due to technology integration and global structural flaws,
call for a systematic approach to fighting fraud. Movements over time show that
legal fabrics especially The Companies Act, 2013 has come quite a long way in
articulating and punishing fraudulent conditioning within corporate entities
despite the fact that cases of corporate fraud continue to rise, it has become
clear that these measures in isolation are not adequate.
The conclusions emerging from
colourful checks demonstrate the treacherous frequency of financial crimes in
Indian associations, rising above global pars and indicating the decline of
trust among associations stakeholders. This situation requires a change of
corporate culture, where the rewards for ethical behavior, compliance, and
adequate disclosure are combined with risk and penalty for malicious intent in
corporate operations. The proposed resolution tactics such as increasing the
extent of regulatory scrutiny, outside audits and grievance redressal
mechanisms are all critical in driving change of corporate culture so that
corporate governance is not an exercise in going through motions but embracing
a culture of right things being done right.
Further, establishment of technology
advancement in identification and prevention of fraudulent activities together
with the encouragement of employees to report fraud without being penalized
enhance the general protection of employees in cases of fraudster. Through the
adoption of a strategic vision on corporate governance and fraud prevention,
organizations can reduce challenges, protect their image and play significant
roles in the overall sustaining of the ever-expanding economy.
Therefore, the root of corporate
fraud in India can never be eradicated unless everybody in the corporate
industry, other regulatory authorities, and the government join hands. If
Ethical practices continue to be promoted and companies put in place broad
measures, it is possible to rebuild that confidence and guarantee sustainable
economic prosperity. Subsequently, the shift to possess better corporate
governance stays to be a progressive course where stakeholders ought to stay
informed and committed and make certain that any arising and rearing heads are
fought against all furry and arrogance in principle with integrity and
accountability.
‘Our ability to manufacture fraud now
exceeds our ability to detect it’ - Al Pacino
[1] “Faraz Alam Sagar”, “Pragati Sharma”, “Kishan Kumar
Gupta”, Fraud Investigation in India, C.A.M., 5, 2(2022).
[2] The Indian Contract Act, 1872,
§17.
[5] Global Economic Crime Survey
2024 – India Outlook, PWC (2024), https://www.pwc.in/press-releases/2024/59-of-indian-organisations-faced-financial-or-economic-fraud-in-the-past-24-months-where-procurement-fraud-emerged-as-the-top-threat-pwc-survey.html#:~:text=New%20Delhi%2C%2018%20December%202024,in%20the%20past%2024%20months.
[6] Dhruv Gumber, Corporate Frauds: Loopholes in the
Current Corporate Governance Framework, Manupatra (Jan.13, 2025, 11:15 AM),
https://articles.manupatra.com/article-details/Corporate-Frauds-Loopholes-in-the-Current-Corporate-Governance-Framework.
[7] Bio Catch, 2024 AI, Fraud,
and Financial Crime Survey, Bio Catch, 2024, 1,2 & 6.
[8] Madhu Bala, CORPORATE FRAUDS AND
LEGAL MECHANISM IN INDIA- AN OVERVIEW, Volume 7 IJCAR 12233, 12233 (2018).
[9] Dr. Jason Hickel, How Britain Stole $45Trillion from India
lied about it – Part 1, T.D. Times, December 17, 2018, at 4.
[10] Top Financial Scams of India:
Why Investors Need to Be Vigilant??, 5Paisa, (Jan.15, 2025, 10:04 AM), https://www.5paisa.com/finschool/financial-scams-why-investors-need-to-be-vigilant/.
[11]Top 5 Financial Scams in India, IndigoLearn,
(Jan.15, 2025, 10:30AM), https://www.indigolearn.com/blogs/Top-5-Financial-Scams-in-India/b218399bd14e4473907fdaa165b20f94?srsltid=AfmBOor9nFwrUaj6nvAQPIrVitiIFNrp1hCwUqc_QAQHZ76obYa5H614.
[12] “Ms. Shweta Wadhwani”, & “Dr.
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Article Information
THE ANATOMY OF CORPORATE FRAUD: GOVERNANCE TO ACCOUNTABILITY INSIGHTS FROM INDIA
Authors: SATYAM GOYAL, NIKITA SINGH
- Journal IJLRA
- ISSN 2582-6433
- Published 2025/01/25
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
- Access Open Access
- License CC 4.0
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