Aayush Tamboli, School of Law Forensics Justice Policy Studies, National Forensics Sciences University Gandhinagar (Gujarat)
ABSTRACT
Corporate fraud is a major problem for India's financial sector, affecting investor confidence, market integrity, and economic stability. To comprehend, stop, and manage corporate fraud in the Indian financial industry, this research undertakes an extensive socio-legal analysis.
The introduction gives some background information, emphasizing how common corporate fraud is in India and how important it is to look closely at its presence in the banking sector. The study's goals emphasize how important it is to identify the socio-legal aspects of corporate fraud and the consequences for all parties involved.
A review of corporate governance practices, including an analysis of board composition and committees, is included in the section on the regulatory framework. In order to highlight the legal measures put in place to combat corporate fraud, the function of important regulatory agencies like SEBI and ED is closely examined in conjunction with an analysis of relevant legal provisions under the Companies Act.
Financial statement fraud, insider trading, Ponzi schemes, and market manipulation are just a few of the types and patterns of corporate fraud that are examined. The methods used, the difficulties in detecting fraud, and the regulatory actions taken to stop it are all covered in this section. The significant effects of corporate fraud on shareholders, investors, market integrity, and public trust are examined in the section on socio-legal ramifications. Examined is the media's influence on public opinion and legislative reactions.
Prevention techniques include safeguarding internal controls, integrating Corporate Social Responsibility (CSR) as a fraud deterrent, and protecting whistleblowers. The efficacy of organizations such as the ED and CBI, as well as the difficulties in collaborating across borders, investigative protocols, and enforcement mechanisms are examined.
Case studies provide information about regulatory actions and oversight. Examples include the Enron Scandal, the Satyam Scam, and the IL&FS Crisis. A comparative study looks at lessons learned from developed economies and best practices from throughout the world, assessing how well they apply to the particular circumstances of India.
In the research's conclusion, major findings are outlined, policy and practice implications are highlighted, and potential directions for future study are suggested. Enhancing corporate governance procedures, promoting legislative changes, and strengthening regulatory monitoring are the main recommendations made to strengthen the deterrent against corporate fraud in the Indian financial sector.
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