Pr

ojectRepor
t
(
APr
ojectRepor
tSubmi
tt
edi
npar
ti
alf
ulf
il
lmentf
ort
heDegr
eeofB.
Com.

Honour
sinAccount
ing&Fi
nanceundert
heUni
ver
sit
yofCal
cut
ta)

CI
TYCOLLEGE
SUBJECT:PROJECTWORK
PAPER-
CC6.
1Ch
B.
COM(
HONOURS)
SEMSTERVI
TOPI
C:CORPORATEFRAUD
NAMEOFTEACHER:Md.
Mahf
uzurRahmanMul
li
ck

MONTH&YEAROFSUBMI
SSI
ON:
2022
 Ti
tl
eoft
hePr
oject
:

ASt
udyon- Whi
teCol
larFr
aud
(
SATYAM COMPUTERSFRAUDCASE)
(
VIJAY MALLYA LOAN FRAUDCASE)
(
IDCOLANDMORTGAGESCANDAL)

Submi
tt
edby

Nameoft
heCandi
dat
e:RI
SADAS

CURegi
str
ati
onNo:112-
1211-
0438-
19

CURol
lNo:191112-
11-
0082

Col
legeRol
lNo.:2835
 Super
visedby
Nameoft
heSuper
visor
:Md.
Mahf
uzurRahmanMul
li
ck

ACKNOWLEDGEMENT
I
tisamat
terofgr
eatpl
easur
etopr
esentt
hispr
oject
on-
“
WHI
TECOLLARFRAUD-(CASESTUDI
ESON)
:-(
SATYAM
COMPUTERSFRAUDCASE)
(
VIJAY MALLYA LOAN FRAUDCASE)
(
IDCOLANDMORTGAGESCANDAL)
”

It
aket
hisoppor
tuni
tyt
othankourr
espect
edPr
i palDr
nci .Si
tal
Pr
asadChat
ter
jeefor
gi
vi
ngmeanoppor
tuni
tyt
owor
kont
hisf
iel
d.

Iam v
eryt
hankf
ult
omySuper
visorPROF.Md.
Mahf
uzurRahman
Mul
li
ckf
orhi
sful
lsuppor
tincompl
eti
ngt
hisPr
ojectwor
k.

Fi
nal
l
y,Iam gr
atef
ult
oacknowledget
heysuppor
tofmyf
ami
lyand
fr
iendsandal
lthe

t
eacher
sandwoul
dalsol
iketot
hankwhof i
ll
edt
hequest
ionnai
re
pr
ovi
dingmeful
lsupport

andco-
oper
atedwi
thmet ocar
ryoutresear
chworkwi
thoutwhi
cht
his
pr
ojectwouldn’
tbepossibl
e..

Nameoft
heSt
udent
:RI
SADAS.
 Super
visor
’sCer
ti
fi
cat
e

Thisist
ocer
ti
f hatMs
yt .Ri
saDasast
udentofB.
Com Honor
sinAccount
ing&
Finance

ofCi
tyCol
l
egeundert
heUni
ver
sit
yofCal
cut
tahaswor
kedundermysuper
visi
onand

gui
danceforherProj
ectWorkandpr eparedaProjectReportwi
ththeti
tl
eWhite
Coll
arFr
audon–( Sat
yam Comput er
sFr audCase,Vij
ayMallyaLoanFraudCase,
I
dcoLandMor tgageScandal
).TheProjectrepor
t,whichsheissubmit
ti
ng,i
sher
genui
neand

or
igi
nal
wor
ktot
hebestofmyknowl
edge.

Pl
ace:Kol
kat
a
Si
gnat
ure:

Name:Md.
Mahf
uzurRahmanMul
li
ck

(
Facul
tyi
nCi
tyCol
lege)
 St
udent
’sDecl
arat
ion
Iher
ebydecl
arethatt
heProj
ectWor
kwiththet
it
leWhit
eColl
arFr
audon–(Saty
am
Computer
sFraudCase,Vi
j
ayMall
yaLoanFr
audCase,
IdcoLandMort
gageScandal
)-

-submitt
edbymef ortheparti
alf
ulfi
ll
mentofthedegreeofB. Com.Honoursi
n
Accounti
ng&FinanceundertheUniversi
tyofCalcut
tai
smyor iginalwor
kandhas
notbeensubmi
ttedearl
iertoanyotherUniver
sit
y/Inst
it
utionfortheful
fi
ll
mentof
therequi
rementforanycourseofstudy.

Ialsodeclar
ethatnochapt erofthi
smanuscr i
ptinwhol
eorinparthasbeen
i
ncorporat
edinthi
sreportfr
om anyear l
ierworkdonebyother
sorbyme.Howev er
,
extr
actsofanyli
ter
aturewhi chhasbeenusedf ort
hisr
eporthasbeenduly
acknowledgedprov i
dingdet
ail
sofsuch

l
it
erat
urei
nther
efer
ences.

CURegi
str
ati
onNo:112-
1211-
0438-
19

CURol
lNo:191112-
11-
0082

Col
legeRol
lNo.:2835

Shi
ft
:Day

Si
gnat
ure:
 CONTENTS
CHAPTER-
1 PAGE
Nos.
1.
INTRODUCTI
ON:
ABSTRACT
1.
1 OBJECTIVEOFTHESTUDY
1.
2 LI
MITATIONSOFTHESTUDY
1.
3 RESEARCH METHODOLOGY
1.
4 LI
TERATUREREVIEW
1.
5 CHAPTERPLANNING

CHAPTER-
2
CONCEPTUALFRAMEWORK:
2.
2.
1DEFINITI
ONOFWHI TECOLLARFRAUD
2.
2VARIOUSTYPESOFWHI TECOLLARFRAUD
2.3PREVENTI
VEMEASURESFORWHITECOLLARFRAUD
2.
4NATIONALSCENARIO
2.
5INTERNATI
ONALSCENARI
O

CHAPTER-3
3.
DATAANALYSI
SANDFI
NDI
NGS:
3.
1CASESTUDY-
1{SATYAM COMPUTERSERVI
CESFRAUDCASE}
3.
2CASESTUDY-
2{VIJAYMALLYABANKLOANFRAUD CASE}
3.
2CASESTUDY-
3{IDCOLANDMORTGAGESCANDAL}

CHAPTER-
4
4.
CONCLUSI
ON&RECOMMENDATI
ONS:
4.
1CONCLUSI
ON
4.
2RECOMMENDATI
ONS

CHAPTER-
5

BI
BLI
OGRAPHY&WEBOLOGY
 Chapt
er–1

I
ntr
oduct
ion

ABSTRACT
Thispaperpr ovidesadet ail
edunder standingbehi ndthemot i
vesof
peoplecommi tti
ngcrimes.Resear chershav enamed―t hepeopl e
commi t t
ingcri
me, wher ethecrimeswer emi nimalandconf inedtoa
parti
cularareaofadmi ni
strat
ionasGr assEat ers.Peopl einvolvedin
whitecol l
arcri
mesandwhi chhasspr eadi nalmostal lfi
eldsof
businessar etermedasMeatEat ers.Wi t
ht headv entoft echnology
andgr owt hofeducation,whitecollarcrimesar eont herise,being
protectedbypr ofessi
onalsf i
ndingloophol esint hejudiciaryand
suppor tfrom t
hegov ernmenti ndir
ectl
y .Thishascr eatedanexus
wher epeoplef r
om almostal lwalksofl if
ehav est artedformi ng
groupt odowhi tecoll
arcr i
mesandbei ngpr ot
ect edby
professionalsinlaw.Thishasl eadt oasi t
uat i
onwher ethesmal l
ti
mer shav ebecomewhi tecoll
arcr
iminals.Talki
ngaboutt he
prevalenceofwhi t
ecol l
arcrimesinIndi
a, t
heyar espr eadingl
ikea
rapidfir
einev eryspher eofsociety
.Thoughcor ruption,oneofthe
speciesofwhi tecol larcr i
mes,hasbeent hemostt alkedabout
i
ssuei nallspher es-social,economicandpol i
tical,notmuch
stri
ngentst eps/ actionshav ebeentakentocur bt hi
smenace.
Thereforetheconcer noft hi
spaperistodef i
newhi tecoll
arcr
ime,
studyitshist ori
cal dev elopmentandf or
mul atetent ati
vesolut
ions
foreradicatingthe

pr
obl
em.

KEYWORDS:
-

Whi
teCol
larFr
aud-Thet
erm‘
fr
aud’
commonl
yincl
udes
act
ivi
ti
essuch

astheft
,cor
rupt
ion,
conspi
racy
,embezzl
ement
,moneyl
aunder
ing,
br
ibery

andext
ort
ioni
nanor
gani
zat
ion.

Gov
ernment
- Her
ether
oleofgov
ernmentandi
tssuppor
t
t
owar
dst
he

v
ict
imsi
sref
err
edt
o.

Educat
ion-Thr
ougheducat
ionpeopl
ear
egai
ningknowl
edge
aboutt
he

cor
por
ateworl
dandusi
ngt
hisknowl
edgef
orsabot
agi
ngt
he
cor
por
atesect
or.
1.
1Obj
ect
ivesoft
hest
udy
Si
nce1939,
thet
erm whi
te-
col
larcr
imei
snowsy
nony
mouswi
tht
he
ful
l

r
angeoff
raudscommi
tt
edbybusinessandgov
ernment
pr
ofessi
onal
s.

Thesecr i
mesar echaracteri
zedbydeceit,conceal
ment ,orviol
ati
on
oftrustandarenotdependentont heappl i
cationorthreatof
physicalfor
ceorv i
olence.Themot i
vati
onbehi ndthesecrimesis
fi
nancial—toobtai
norav oidlosi
ngmoney , pr
operty,orserv
icesor
tosecureaper sonalorbusinessadvantage.

Thesear
enotv
ict
iml
esscri
mes.Asingl
escam candest
roya
company
,

devast
atefamil
iesbywi pi
ngouttheirl
if
esavi
ngs,
orcosti
nvest
ors
bi
ll
ionsofdoll
ars(orevenallt
hree)
.Today’
sfr
audschemesare
moresophist
icatedthanever.

Ther
easonbehi
ndt
hisst
udyi
s–

 Tounder
standt
hev
olumeofcor
por
atecr
imest
hati
s
commi
tt
edi
nIndi
aandabr
oad.
 Toknowi
tsef
fect
sont
heI
ndi
aneconomyandt
he
 wor
ldasawhol
e.
 Toknowt hevar
iousrolesofthegover
nment
s
thr
oughouttheworl
dt opreventt
hiski
ndoff
raud.
 To know the amountofexpendi t
urethatis
i
ncurredbythegovernment,fortheprev
ent
ion
andforcr
eati
ngawarenessofsuchfr
aud.

1.
2Li
mit
ati
onsoft
heSt
udy
:

Ther earecer
tai
nobstaclesthatarefacedbyev er
ypersonwhois
maki ngtheproj
ecton“Whi t
eCollarFraud”,i
neveryst
epofthe
project.Someoftheproblemsthataref acedbymear easgi
ven
below-

 Al
lresearchproj
ect
scostmoney
.Conducti
ngaproj
ectl
ike
“
WhiteColl
arFr
aud”i
sanexpensi
veaf
fai
r.
  Lackofresourcesorshari
ngofthesameresour
cefor
multi
pleproj
ectscancreatet
roubl
ewhil
econducti
nga
proj
ect.

 Ti
mei
sal
way safact
ort
obeconsi
dered.I
tusuall
ytakesa
lotoft
imetoprepar
eagoodproject
.

 Administ
rat
ivesupervi
sionisnecessar
yformakinga
pr
ojectonWhi t
eCollarFraud,
forsupervi
sionov
erthe
pr
ojectandguidance.

 Ver
yimport
antt
opi
csmaynotbeconsider
edf easi
bleuni
t,
unl
essi
tisi
naccor
dancewi
thet
hicalgui
deli
ne.

1.
3RESEARCHMETHODOLOGY

Thi
schaptershal
ldi
scussest
her
esear
chmet
hodav
ail
abl
e
andusedf
orthe
st
udyandwhati
sappl
icabl
efori
t.Thi
sent
ir
epr
ojecti
sbased
on
secondarydat
a,i
ncl
usi
onofquant
it
ati
veandqual
it
ati
vedat
a
whichis
col
lect
ed f
rom v
ari
ous sour
ces.The pr
ocess by whi
ch
r
esear
chgoabout
thei
r work of descr
ibi
ng, expl
aini
ng and pr
edi
cti
ng
phenomenoni
scal
led
met
hodol
ogy
.Ther
ear
etwot
ypesofmet
hodol
ogy
:-

Pri
mar yDat
a:Thedat
acol
lectedfr
om fir
sthand
exper
ienceandfr
om t
hesourceit
self
,iscall
ed
Pri
mar ydat
a.
SecondaryData:Thedatawhi
chisextract
edfrom
thepri
mar yi
nfor
mat i
onandwhichisusedbythe
publ
icforstudyisknownasSecondaryData.

AREAOFSTUDY:
-
Thisprojectisdirect
edtowar dsthestudyofwhit
e
coll
arfraud.It'
smai naimistostudythef r
auds
commi ttedbyt hethreecorporat
ions,
ofwhi cht
hetwo
arepriv
at esectorcorporat
ionsandonei sapubli
c
sectorcorporation.

SAMPLE:
-
Thi
sentir
eproj
ecti
sbasedondat
acol
lect
edf
rom
var
iousbooksof
v
ari
ousaut
hor
sandaswel
lasf
rom t
heWor
ld
Wi
deWeb(
WWW)
.

TOOLSOFDATACOLLECTI
ON:
-

Forthi
sresear
chst
udysecondar
ydat
ahasbeenadopt
edf
rom
var
ious

sour
ces,
suchasf
rom,
Books,
NewsPaper
s,andv
ari
ous
websi
tes.

METHODOFANALYSI
S:-

Forthi
sst
udy,
descr
ipt
iver
esear
chmet
hodwasut
il
ised.
Itcoul
dal
so
suggestunant
ici
pat
edhy
pot
heses.Nonet
hel
ess,
itwoul
d
beveryhardto
rul
eoutalter
nati
veexpl
anat
ionsandespeci
all
yinf
er
causat
ions.Thusthi
s
st
udyuseddescr
ipt
iveappr
oach.
 1.
4
I n1939, EdwinH.Sut herl
and(FounderofWhi teCollar
Fraud),aCr i
minologi
standSoci ol
ogistforwarded:He
defi
nedt heconceptascr imebyani ndivi
dualofhighsocial
st
atusandr espectintheirareaofoccupation.Edwinalso
i
ncorporatedthatcri
meswer ecommi tt
edbyl egalfi
rmsand
corporationsaswell.

 Ger hardBlickl
e,(2006).Universi
tyofBonn,Germany ,Some
Personal i
tyCorrelatesofBusiness-Whi t
e-Coll
arCr i
me:He
explainedthat,Psy chologi
calvari
abl
esdodi scri
mi nat
e
bet weenwhi t
e-coll
arof f
endersandnon-offenders.Itcanbe
specul atedthatinaddi ti
ontohighhedonism, l
owi ntegri
ty
andhighconsci entiousnessareimportantfeatures.

 JohnD.Gi l
l,J.D., CFEandMar kScott,J.
D.TheLegal
Envir
onmentandWhi t
eCol l
arCr i
me( 2008) :Whitecol l
ar
cri
mei saphr aseusedt orefertoandencompassa
compl i
catedwebofnumer ousi nter
relatedandov erlapping
areasoft hel aw.Theysai dwhi tecollarcr i
mei snotan
autonomousdi scipline;i
nstead, whit
ecol larcri
mei smost
assuredlyinter discipli
nary—combi ningi ndiv
idual
sf rom
multi
pledi sciplinesandpr ofessions,suchasaccount ants,
audit
ors,at t
or ney s,&i nv
estigators.
  DavidO.Fr
iedr
ichs,
(2009)
.Tr
ust
edcr
imi
nal
s:Whi
te
col
larcr
imein

contempor
arysoci
ety
-Dav
idO.Fr
iedr
ichsexpl
ainedwhi
te-
col
lar

cr
imeasanon-
viol
entcr
imecommi
tt
edt
hroughdi
shonest
y
or

decept
ionbypeopl
epr
ofessi
onaloccupat
ionalst
atus,
for
fi
nanci
al

benef
it
sbyof
fender
soft
echni
calbusi
nessandgov
ernment

knowl
edge.

 RFMei er,
JFShor t(2012)White-Coll
arCrime-An
AgendaforResear ch:Theyhaver ecentl
ydefined
WhiteColl
arCrimeast heuseofasi gnifi
cantposit
ion
ofpowerforil
legalgainthatresultsindamageor
harmtov i
cti
msasmeasur edbyfinanciall
oss,
physi
calharm,anddamaget othecommuni t
y'smoral
cli
mate.Theeconomi cimpactofwhi te-
coll
arcri
mei s
farmorecostl
yt hanor di
narycri
me.

1.
5CHAPTER
PLANNI
NG
Thi
spr
ojectexpl
ainst
hest
udyofWhi
teCol
larFr
aud.

1.Thef i
rstchaptergiv
esusanov ervi
ewont hetopi
cof
Whit
eCollarFraud.Abr i
efrevi
ewoflit
erat
urei sprovi
dedto
dev
eloptheobj ect
ivesofthi
sproject
.Aparticular
methodol
ogyi sadoptedtoaddresstheresearchagendais
menti
onedinbr ief
,thoughther
eremaincertainlimit
ati
ons
t
owhi
cht
hispr
ojecti
ssubj
ect
edt
o.

2.I nthesecondchapt erbrief

lydefi
nesthetopicofWhi te
Col l
arFr aud.Her ethev ari
oustypesoffraudisalso
ment i
oned.Wegetapi ctureofthenati
onaland
i
nt ernational scenari
o.Thei mpactofWhi t
eCollarFraudon
theGl obal Wor ldisdiscussedhere.Fur
therprecautionar
y
measur est hatareadopt edtopreventWhiteCollarFraudis
alsoment ionedi nthi
schapt er.

3.Inchapt erthr
ee,wegetani nsi
ghtintov
ari
ouscase
studies.Heret wocasest udi
eshavebeenconduct
ed,
namel y,Saty
am Comput er’
sFraudcaseandMoney
l
aunder ingcasebyVi jayMally
aandOdi shaI
ndust
ri
al
Infr
astructur
eDev elopmentCor por
ati
onlandmort
gage
scandal.

4.Inchapterfour,
aconclusionhasbeendrawnont hebasi
s
ofthethreecasestudi
es.Itbasi
call
ystat
est heoutcomeof
thesefraudsthathasbeencommi tt
edandt heprecauti
ons
thatshouldbetaken.

5.I
nthefif
thchapt
er,thebibli
ographyandwebologyhas
beendraf
ted.
Thisstat
est hesourcesfrom wherethe
i
nformati
onandstati
stical
diagramshasbeent aken.
 CHAPTER-
2
1. CONCEPTUAL
FRAMEWORK

WHI
TECOLLARFRAUD
2.
1DEFI
NITI
ON
Fraudisdefinedasanyi ntentionalactcommi ttedto
secureanunf ai
rorunl awf ulgainbut“ Fraudulent
Practi
ce”meansanyact i
onoromi ssi
on, i
ncluding
misrepresentat
ion,thatKnowi nglyorrecklessly
misleads,oratt
empt st omi slead,apar t
yt oobt aina
fi
nancialbenefi
tort oav oidanobl igati
on. Corrupt
Practi
cemeanst heof fer
ing,gi vi
ng,receivi
ngor
soli
cit
ing,dir
ectl
yori ndirectl
y ,ofanythi
ngofv alue
toinfl
uenceimpr operlytheact ionsofanot herpar ty
.
Thisthoughtof“ WHI TECOLLARFRAUD”ev ol
ved
withtheCriminologistandSociologistEdwi nH.
Sutherl
and,inthey ear1939,whopopul ari
zedthe
term whit
ecol l
arcrimes‘bydefiningsuchacr i
meas
one,commi tt
edbyaper sonofr espectabili
tyand
highsocialstat
usi nthecourseofhi soccupat i
on.
Sutherl
andalsoi ncludedcri
mescommi ttedby
corporat
ionsandot herl
egalentit
ieswi thi
nhis
defi
niti
on.
Sutherland‘sstudyofwhi t
ecollarcri
mewas
prompt edbyt heviewthatcri
mi nologyhad
i
ncorrect l
yfocusedonsoci alandeconomi c
determi nantsofcri
me, suchasf amilybackgr
ound
andlev elofwealth.Therehavebeencr ooksand
unethicalpersonsin
business, v
ari
ousot herprofessi
ons,whot endto
becomeunscr upulousbecauseofnor easonapart
from t
het hi
rstofgainingmor eandmor efor
themselves.Thesedev iant
shav eleastr
egardfor
ethi
calandmor alhumanv alues.
Ther
efore,
theycarryont
hei
ril
legalact
ivi
ti
eswi
th
i
mpunitywithoutt
he
fearofl
ossofrespectandpr
est
ige.Thesecr
imes
areofthenat
ureofwhite
col
larcr
imes’
whichi
stheessent
ialout
comeoft
he
dev
elopmentoft
he
compet
enteconomyoft
het
went
y-f
ir
stcent
ury
.
 1.
2VARI
OUSTYESOFWHI
TE
COLLARFRAUD

1.Fi
nanci
alI
nst
it
uti
onFr
aud
2.Mor
tgageFr
aud
2.
1FRAUDFORPROFI
T
2.
2FRAUDFORHOUSI
NG

2.Heal
thCar
eFr
aud
 4.
IDENTI
TYTHEFT

5.
MoneyLaunder
ing:
 2.
3PREVENTI
VEMEASURESFORWHI
TE
COLLARFRAUD

A.Thefir
standmostsignif
icantstepwhichcanbetakento
reduce oreli
minat
e whi t
e col l
ar cr
ime agai
nst major
companies and corporati
ons deal s with account
ing
systems.Maj
orcompanieshav e

compl exfinanci
alreporti
ngsy stems.Thepr obl
em withthis
i
st hatt hesecompl exr eporti
ngsy stemswhi chareof t
en
designedt oensur ethatnomaj orfi
nancialt
ransact
ioncan
take place wi t
houtmul t
iple approval
s by manager s at
vari
ousl evelswithi
ntheor gani
zation.

B.A second pr obl

em i st hat major companies and
corporati
onshav etopurchasemanygoodsandser vi
ces.In
manyi nstances,
ifthepri
ceofagoodorser vi
ceisrel
ativel
y
small,therearef ewerstepsandl i
tt
leoversightf
ort hese
tr
ansact i
ons.

Thetypi
calor
gani
zat
ionl
oses5% ofr
evenuesev
eryy
ear
duet
o

f
raud.(
About$895bi
ll
ionwasl
osti
ntheU.
S.l
asty
ear
.)

Tocapit
ali
zemosteffect
ivel
yonanti
fraudspendi
ng,
wecan
consi
derthesepr
eventi
vemeasures:

1.
Str
onginter
nalcont
rol
s 2.Tr
aini
ng- 3.
Management’
shel
p
2.
4Nat
ionalScenar
io
FRAUDSCENARI
OINI
NDI
A-
Whitecol l
arcr i
mesar etobeconsi der edasagl obal
phenomenont owhi chI ndiaisnoexcept ion.Asdi scussed
earli
er,whi t
ecol larcrimesemer gedi nI ndi awi tht headv ent
oftheBr it
ishcol onizationdur i
ngt heper iodofi ndust ri
al
capitali
sm.Pr i
ort othat, i
nstancesofmenwor kingwi t
ht he
Distri
ctt r
easur yembezzl ingwi t
ht hemoneykeptunderhi s
saf ecustodyorbr ibingpr acti
cedamongt heof ficialswer e
found.Thechar tbelowcompar est het opsi xf raud
categoriesatgl oball evelwithIndi a.Inmostoft hecases,
Indiaisdoi ngmuchwor sethani tsgl obalcount er partsare.
Worldwi demanagementconf l
ictofi nter est,i
nt ernal
fi
nanci alf
raud, corruptionandbr i
ber yandv endor
procurementr elatedf raudshav eincr eased.Phy si caltheft
ofasset sandi nf ormat i
ont heftdecr eased.I ndianbusi ness
crucialpainpoi ntsar ecor r
uptionandbr iber y
,infor mat i
on
t
hef t
,internalfi
nanci alfraud, f
inanci almi smanagementand
vendorpr ocur ement .

I
NCREASI
NGFRAUDI
NINDI
A
 2.
5Int
ernat
ionalScenar
io-
Ar i
singawar enessofongoi ngcor rupt i
on,fraudandbr iber
y
andhasr eachedboar dsofdi rectorsandseni or
managementofcompani esi nmul tiplecount ries,but
pressur etogener ategr owth, especiallyinrapi d-growth
mar kets,keepsmanymanager sf r
om addr essi ngpr obl
ems.
Thewor ld'
sdev elopingcount r i
eslostat otalof$946. 7
bi
lli
ont ocor rupti
on, tr
ademi sinvoicingandt axev asionin
2011, accor di
ngt other esear ch. Thet otalfigur esare
stagger i
ng: between2002and2011, dev el
opi ngcount ri
es
l
ostabout$5. 9tr
ill
iontoi ll
icitout f
lows( I
ll
icitOut fl
ows
fr
omDev elopingCount ries2002- 2011, ”wasr eleasedby
Global FinancialI
ntegr i
ty,ar esear chandadv ocacy
organizat i
onbasedi nWashi ngt on,D. C).

Recentsur
vey
sbyPr
icewat
erhouseCooper
sandEr
nst&
Youngshowthat

i
ncident
soffraudhav
eincr
easedgl
obal
lyby22%ov
ert
he
pasttwoyear
s

andher
eintheUKtheaver
agecor
por
atef
raudcost
sa
companysome£200,
000.
CHAPTER-
3

3.
DATAANALYSI
S
ANDFI
NDINGS
 .

3.
1CASESTUDY-
1

THESATYAM SCANDAL
/
/INTRODUCTI
ON/
/

Satyam Comput erServi

cesLimit
edwasa
“ri
sing–star“intheIndian“outsour
ced”
IT-ser
vicesindust
ry.The
company was f or
med i n 1987 i n
Hayderabad(I
ndi
a)byMr.Ramal i
ngaRaju.
Thefirm beganwith20empl oyeesand
grewrapidl
yas“gl
obal
”business.
Satyam wasasanexampl eof“I
ndia’
s
growingsuccess”.By2003,
Satyam’sIT
servi
cesbusinessincl
uded13,
120
techni
calassociat
essweici
ngover300
 cust
omer
swor
ldwi
de.

“I
n2007,Ernst&Youngawar dedMr .
Raj
uwi t
ht he
‘
Enter
preneuroftheYear’award.OnApri
l14,2008
,Saty
am wonawar dsfr
om MZConsul t
’sfor
bei
nga‘leaderi
nI ndi
ainCGandaccount abi
li
ty’
.
Fr
om 2003-2008, i
nnearlyallf
inanci
almet
ri
esof
i
nter
esttoinvestors,
thecompanygr ew
measuably
.Satyam gener at
edUSD$467mi ll
ion
i
ntotalsal
es.

Over,t
hesame
peri
od(2003-2009),t
hecompanywas
tr
adingatanav eragetr
ail
ingEBI
TDA
multi
pleof15.36.

Final
ly
,begi
nni
nginJanuar
y2003,
ata
sharepri
ceof138.
08INR,
Satyam’sst
ockwoul dpeakat526. 25
INR—a300%i mpr ovementinshareprice
aft
ernearl
yfiveyears.Satyam cl
earl
y
generat
edsignif
icantcorporat
egrowth
andsharehol
derv al
ue.Thecompanywas
aleadingst arandar ecogni zablenamei n
aglobalITmar ketplace.Theext er
nal
envi
ronmenti nwhi chSat yam operat
ed
wasi ndeedbenef i
cial tothecompany ’
s
growth.But ,thenumber sdidnot
repr
esentt hef ullpicture..Thecaseof
Satyam account i
ngf raudhasbeen
dubbedas“ India’
sEnr on”.Satyam
becamet hecent erpieceofa“ massive”
accountingf raud.
 St
rengt
hs:
 Gl
obalpr
esence
➢ Br
oadr
angeofr
esear
chanddev
elopmentSer
vices
Br
oadser
vicespor
tfol
io
➢ St
rat
egi
cal
li
ances
➢ Str
ongf i
nanci
alposi
ti
on,
companyhasr
evenueofUS
$1.8bil
li
onand
empl
oyeest
rengt
hof33,
353

Weaknesses
 Lowoper
ati
ngmar
ginofot
hergr
oupofcompani
es
➢I
nef
fi
cientandi
nef
fect
ivei
nter
nalaudi
torst
ruct
ure.
➢Incompet
entChi
efExecut
iveOf
fi
cerandChi
efFi
nanci
al
Of
fi
cer.

Oppor
tuni
ti
es

 NewBr
andI
dent
it
yandsy
ner
gywi
tht
hepar
entcompany
 ➢ Launchi
ngBPOser
vices
➢ Hugepot
ent
iali
ndomest
icmar
ket
➢I
ncr
easi
ngi
nGl
obalI
Tspendi
ng

Thr
eat
s:
 Fl
uct
uat
ionsi
ncur
rencyexchange
➢ Pr
ocessNon-
compl
iance
I
ncr
easi
ngcostofHumancapi
tal
➢ Ri
skduet
oincr
easi
ngI
Tcompl
exi
ty
SATYAM COMPUTER
SCAM
OnJanuar
y7,
2009,
Mr.Raj
udi
scl
osedi
nal
ett
ert
oSat
yam
Computer
s

Li
mit
edBoardofDi
rect
orst
hathehadbeenmani
pul
ati
ngt
he
company
’s

accounti
ngnumbersf
ory
ear
s.Mr
.Raj
ucl
aimedt
hathe
overst
atedasset
son

Saty
am’ sbal
ancesheetby$1.
47bi
ll
ion.Near
ly$1.
04bi
ll
ioni
n
bankloansand

casht
hatt
hecompanycl
aimedt
oownwasnon-
exi
stent
.Sat
yam
al
so

under
repor
tedli
abi
li
ti
esoni
tsbal
ancesheet
.Sat
yam ov
erst
ated
i
ncomenear l
y

ever
yquar
terov
ert
hecour
seofsev
eraly
ear
sinor
dert
omeet
anal
yst

expect
ati
ons.Forexampl
e,t
her
esul
tsannouncedonOct
ober17,
2009

overstatedquar
ter
lyr
evenuesby75per
centandpr
ofi
tsby97
percent.Mr.Raj
u

andthecompany
’sgl
obalheadofi
nter
nalaudi
tusedanumberof
di
ffer
ent

t
echniquest
oper
pet
rat
ethef
raud.“
Usi
nghi
sper
sonalcomput
er,
Mr.Raju
cr
eatednumerousbankst
atement
stoadv
ancet
hef
raud.Mr
.
Raj
uf al
sif
iedt
he

bankaccount
stoi
nfl
atet
hebal
ancesheetwi
thbal
ancest
hatdi
d
notexi
st.He

i
nfl
atedt
heincomest
atementbycl
aimi
ngi
nter
esti
ncomef
rom
t
hefakebank

account
s.Mr.Raj
ual
sor
eveal
edt
hathecr
eat
ed6000f
akesal
ary
account
sover

thepastf
ewyearsandappr
opr
iat
edt
hemoneyaf
tert
he
companydeposi
tedit
.

Thecompany’sglobalheadofi
nter
nalaudi
tcr
eat
edf
ake
cust
omeridenti
ti
es

andgenerat
edf
akeinv
oicesagai
nstt
hei
rnamest
oinf
lat
e
rev
enue.Thegl
obal

headofinter
nalaudi
tal
sof
orgedboar
dresol
uti
onsandi
ll
egal
ly
obtai
nedloans

f
ort
hecompany
”.
 Fabri
cat
edbal
ancesheetandincomest
atementof
Saty
am:asofSeptember30,2008.

I
temsRs.
incr
ore Act
ual Repor
ted
Di
ff
erences
CashandBankBal
ances 321 5361
5040

Accr
uedi
nter
estand

BankFi
xedDeposi
ts Ni
l 376.
5
376

Underst
atedLi
abi
li
ty 1230 None
1230

Ov
erst
atedDebt
ors 2161 2651
490

Tot
al Ni
l Ni
l 7136

Rev
enues(
Q2FY2009) 2112 2700
588

Oper
ati
ngPr
ofi
ts 61 649 588
Promot
er’
sshar
eholdi
ngpatt
erni
nSat
yam
Computer
sfr
om 2001to2009.

Per
cent
age%

(
AsonPr
omot
er’
shol
dingi
n%)
Year %
2001 26%

2002 22.
26%

2003 20.
76%

2004 17.
35%

2005 15.
67%

2006 14.
02%
 2007 8.
79%

2008 8.
74%
2009 2.
18%

St
ockChar
ti
ngofSat
yam f
rom December
2008t
oJanuar
y2009

Dat
e(Yr
.)
Amt
.$(
Cr.
)
16/
12/
2008 226.
55
17/
12/
2008 157.
1

18/
12/
2008 169.
5

22/
12/
2008 162.
45

23/
12/
2008 140.
7

26/
12/
2008 135.
65

29/
12/
2008 148.
1
 30/
12/
2008 160.
7

2/
1/2009 177.
2

5/
1/2009
167.
15

6/
1/2009
178.
9 7/
1/2009
39.
95
 3.
2CASESTUDY–2
VI
JAYMALLYA’
s
MONEYLAUNDERI
NGFRAUD
I
NTRODUCTI
ON
Vi
jayMal
ly
aisanI
ndi
anbusi
nessmanandpol
it
ici
an.
Thesonof
busi
nessman

Vi
ttalMall
ya,hei
stheex-
chai
rmanofUni
tedSpi
ri
tsLt
d,t
he
l
argestspi
rit
s

companyi
nIndi
aandcont
inuest
oser
veasChai
rmanofUB
Group,
anI
ndian

conglomer
atewithi
nter
est
sinbev
erageal
cohol
,av
iat
ion
i
nfrastr
uct
ure,
real

est
ateandfer
ti
li
zeramongot
her
s.Hehasbeent
heChai
rmanof
Sanof
iIndi
a

(pr
eviousl
yHoechstAGandAventi
s)aswellastheChai
rmanof
BayerCropSci
encei
nIndi
aforover20year
s,inaddi
ti
ontobei
ng
theChairmanof

sever
al ot
hercompani
es.Mal
ly
aal
soco-
ownst
heFor
mul
aOne
team Sahara

For
ceIndi
a.Hi
scompani
esownI
ndi
anPr
emi
erLeaguet
eam
Royal

Chall
engersBangal
ore,
theI
-Leaguet
eamsMohunBaganACand
EastBengal

FC.Heisalsoamemberoft
heWor
ldMot
orSpor
tCounci
l
repr
esent
ingIndi
a

i
ntheFIA.Heisal
soknownf
orhav
ingl
aunchedKi
ngf
isher
Ai
rl
ines,
anair
li
ne
establ
ishedasamaj orbusi
nessv
ent
urei
n2005t
hatl
ater
becamei nsol
ventand

wasshutdowni
n2012.

Uni
tedBr
ewer
iesHol
dingsLi
mit
ed(
UBHL)orUBGr
oupi
san
I
ndi
an

congl
omerat
ecompanyheadquar
ter
edi
nUBCi
ty,
Bangal
orei
n
thest
ateof

Kar
nat
aka,
Indi
a.

[
1]I
tscor
ebusi
nessi
ncl
udesbev
erages,
avi
ati
onand

i
nvest
mentsinvar
ioussect
ors.Thecompanymar
ket
sbeerunder
t
heKingf
isher

br
and,andownsv
ari
ousot
herbr
andsofal
cohol
icbev
erages.I
t
al
solaunched

Kingfi
sherAi
rl
ines,
anai
rl
inei
nIndi
awhoseoper
ati
onhasbeen
halt
edafter

pr
obl
emsin2014t
hatl
edt
oit
sli
censebei
ngr
evokedbyt
he
DGCA.The

companychai
rman,
Vij
ayMal
ly
a,l
eftI
ndi
aon2Mar
ch2016,
al
legedl
yto

escapel
egalact
ionbyI
ndi
anbankst
owhom heowessome
₹9,
000cror
e

(
US$1.3bi
ll
ion)i
nloans.I
tnowhasgr
eat
ert
hana40%shar
eof
t
heIndi
an

br
ewingmar
ketwi
th79di
sti
ll
eri
esandbot
tl
inguni
tsacr
osst
he
worl
d.
STRENGTHSofKi
ngf
isherAi
rl
ines
 Str
ongbrandv
alueandr
eput
ati
oni
nthemi
ndsoft
he
consumer

•UBgr
oupast
hepar
entcompany

•Fi
rstI
ndi
anai
rl
inet
ohav
eanewf
leetofpl
anes

•Qual
it
yser
viceandi
nnov
ati
on

•Mor
ethan80dest
inat
ions

•Lesst
han100peopl
e(empl
oyees)perai
rcr
aft

WEAKNESSESofKi
ngf
isherAi
rl
ines
•St
il
li
nRED(
Sti
llt
oBr
eakEv
en)

(
Anout
standi
ngof950cr
sonl
ytooi
lmar
ket
ingcostt
il
lmayend)

•Hi
ght
icketpr
ici
ng(
KFFi
rst&Cl
ass)

•Toughcompet
it
ionf
rom I
ndi
anaswel
lasi
nter
nat
ionalpl
ayer
s.
 OPPORTUNITI
ESofKi
ngf
isher
Air
li
nes

•Ifabl
etosur
viv
eforacoupl
eofy
ear
s,t
hencanhav
eabi
gmar
ket
share

•Unt
appedI
nter
nat
ionalMar
ket
s

•Unt
appedcar
gomar
ket

•Expandi
ngt
our
ism busi
ness

THREATSofKi
ngf
isherAi
rl
ines
•Fal
li
ngdemand
•Ov
ercapaci
tyi
ntheski
es
•ATFpr
ices
•Economi
csl
owdown
•I
nfr
ast
ruct
urei
ssues
 THEFRAUDCOMMI
TTED
BYVI
JAYMALLYA
Inthey ear2006, IDBIBankgotapr oposalf rom Ki ngfi
sherAi r
li
nes, seekingf undsto
acquireaircraft.Vij
ayMal lyahadl aunchedt heairlinethepr ev i
ousy ear,inMay2005.He
stri
kesadeal wi t
htheBr it
ishbeermakerScot t
ishandNewcast le,whichhadboughta37. 5
percentst akei nMal l
ya’sUnitedBr ewer iesLtdf orRs940cr ore.Howev er,whent he
Kingfi
sherpr oposalcameupatameet i
ngoft hecr edi
tcommi tt
eeoft heIDBI ,t
heaircraf
t
acquisiti
onpl anwasn’ tpermittedt ofly.Asoi lpricesst artedtocl i
mb( anav erageof
$72.68adol l
arbet ween2005and2010)andt hecompanyst ruggledt orunabusi nessthat
i
ncludedaf ull
-servi
ceai r
li
neandal ow-costcar ri
er ,i
tsf i
nancesf l
ounder edandi tsdebt
burdenandl ossessur ged.Butbyt heendofMar ch2008, Kingfi
sher ’
sdebthadmount edto
Rs934cr ore.Ay earlater,i
thadmul ti
pliedt oRs5, 665cr or e.It
snetl osseswi denedfrom
Rs188cr orein2007- 08t oRs1, 608cr oret hefollowingf inancial y
ear .

By2009-10, Kingfi
sherAi r
li
neshadaccumul at edadebtofov erRs7,000cr ore.Itcont i
nued
topil
eupl ossesandhadal r
eadyturnednet-worthnegativethepr evi
ousf i
nanci aly ear
.In
November2010, banksf orthefir
sttimerestructur
edKingf i
sher’
sdebt .StateBankofI ndia
convert
edRs1, 355croreofdebti nt
oequi t
yata61. 6percentpr emium tothemar ketpri
ce
oftheKingfisherAirl
inesstock.Besides,
thebanker sstretchedt heperiodofr epay mentof
l
oanst oniney earswithat wo-yearmoratori
um, cuttheinterestrates,
andsanct ioneda
fr
eshloan.Howev er,abreatheronloanrepay mentwasn’ tenought orev i
veKi ngfisher
Air
li
nes,whichcont inuedt obleedwitheverypassingyear .

Kingfi
sherAirl
ineshadpledgeditsbrandtobanksf oranestimat edRs4, 100crore.Mall
ya
hadgivenaper sonalguarant
eeofRs248. 97cr orewhi l
eUnitedBr eweriesHoldingshas
provi
dedacor porateguarant
eeofRs1, 601.43crore.Inaddition,Kingfi
sherhaspr ovi
deda
pooledcoll
ateralsecur
it
yofRs5, 238.59crore,whichincludesKi ngfi
sherHousei nMumbai ,
Kingfi
sherVil
lainGoa,andhy pothecati
onofhel i
copters.Besides,thepledgedsecur i
ti
es
i
ncludegroundsuppor tandotherequipment( Rs101. 58crore),comput ers(Rs22.43crore)
,
offi
ceequipment( Rs13.39crore),
furni
tur
eandf i
xtures(Rs33. 35crore)andanai rcr
aft
(Rs107.77crore).

InApri
l2015, Mumbai Inter
nat
ionalAi r
por tPri
vateLi
mited(MI AL)soldMal ly
a’sper sonal
air
craf
t(it
sr egi
strat
ionnumber ,VT-VJM, mat cheshi
sinit
ials)f orRs22l akhstor ecov er
air
portduesoft hegroundedairl
ine.Ast roublemounted,Kingf isherAir
li
neswaschasedby
theservi
cetaxdepar tmentovernon- paymentofser vi
cetaxofov erRs115cr ore.The
air
li
neshadal sodefaultedoncredit
ingov erRs372croreofI ncomeTax.Themat teris
nowbef or
et heSupremeCour t,andDi ageo, Mall
ya’
scompani esandt heirl
ender sagr eedin
November 2015f ort
hedozensofpet it
ionsinthemat t
ertobehear dinApril2016.
Current
lyVijayMallyahasbeenchar gedwi thatleast
27casesi nv ar
iouscourts.Outofthese,atleast22are
rel
atedtoloandef aultbyKingf
isherAirl
ines—an
amountt hatstoodatRs9, 091.40croreattheendof
November2015, accordi
ngt oUnionFinanceMi nist
er
ArunJaitl
ey, whospokei nParl
iament.
 THEAMOUNTOFLOANFRAUD
COMMI
TTEDOFVI
JAYMALLYA
2008-
2015(
Yrs.
)

Year Amount

2008-
09 943

2009-
10 5667

2010-
11 7000

2011-
12 2900

2012-
13 6493

2013-
14 9091

2014-
15 9400

2015-
16 9700
 3.
3CASESTUDY-
3
ODI
SHAI
NDUSTRI
ALI
NFRASTRUCTURE
DEVELOPMENTCORPORATI
ONLAND
MORTGAGESCANDAL
I
NTRODUCTI
ON
Facili
tatingindustriali
nvest ment sthr
oughpr ovidingready-
to-useinfrastructureis
ourcor ebusi ness.Tot hi
spur suit
,alargenumberofi ndustr
ialestates,i
ndust ri
al
areas, I
TPar ks, ThemePar kshav ebeenest abli
shedi ndif
ferentstrategiclocations
ofOdi sha.Manyot herinfrastructurefacil
it
ieshavebeenconst r
uctedl i
ker oads,
drains,powersuppl y,watersuppl yandot herameni ti
eshavebeenpr ovided.And
furt
her ,developedpl otsandbui l
t-
upshedsar eall
ottedtoentrepreneursi ntending
toset -
upt heirindustri
alvent uresatattract
iverates.

Morest r
ucturesbuil
tbyI DCOareasf ol
lows- 105Industri
alEstat
es, Areasin
str
ategiclocati
ons,I
ndust ri
alGr
owthCent ersatKal i
nganagar,
Jhar suguda,
ChhatrapurandKesinga, I
IDCentersatKhur da,ParadeepandRay agada, FoodPar
k
atKhurdaand20Di vi
sionalOffi
cesspreadingacrosst heStat
ecat eri
ngt othe
needsoft heentrepr
eneur s.

Maj
ori
ndust
ri
alpr
oject
srequi
rel
argest
ret
chesofl
andatspeci
fi
clocat
ions

baseduponpr
ojectr
equi
rement
s.I
DCOpr
ovi
dest
hef
oll
owi
ngassi
stance;

•I
dent
if
icat
ionofPr
ojectSi
te

•Al
ienat
ion/acqui
sit
ionofl
andonbehal
foft
hepr
oject

•R&RFaci
li
tat
ion

•For
estCl
ear
ance
 S.
W.O.T.ANALYSI
SOF
INDUSTRIAL
I
NFRASTRUCTUREDEVELOPMENT
CORPORATI
ON
St
rengt
hs:
❖ Empl
oymentandt
rai
ningoppor
tuni
ti
esi
nthef
iel
dofconst
ruct
ion.

❖ Pr
ivat
esect
orhousi
ngboom andcommer
cialbui
ldi
ngdemands

❖ Const
ruct
ionoft
hemul
tibui
ldi
ngpr
oject
satf
easi
blel
ocat
ionsi
n
t
he

count
ry.

❖ Goodstruct
urednat
ionalnet
wor
kfaci
li
tat
est
heboom of
const
ruct
ion

i
ndust
ry.

Weakness:
❖ Di
stancebet
weenconst
ruct
ionpr
oject
sreducesbusi
nessef
fi
ciency
.

❖ Tr
aini
ngi
tsel
fhasbecomeachal
lenge.

❖ Changi
ngski
l
lsr
equi
rement
sandanagei
ngwor
kfor
cemay
accent
uat
e

t
heski
ll
sgap.

❖ Ext
ernalal
locat
ionofl
argecont
ract
sbecomesdi
ff
icul
t.
Oppor
tuni
ti
es:
❖ Conti
nuouspr
ivat
esect
orhousi
ngboom wi
llcr
eat
emor
e
const
ructi
on

oppor
tuni
ti
es.

❖ Publ
icsect
orpr
oject
sthr
oughPubl
icPr
ivat
ePar
tner
shi
pswi
llbr
ing
f
urther

oppor
tuni
ti
es.

❖ Mor
efl
exi
blet
rai
ningdel
iv
eryt
echni
quesar
enowav
ail
abl
e.

Thr
eat
s:
❖ Longt
erm mar
keti
nst
abi
l
ityanduncer
tai
ntymaydamaget
he

oppor
tuni
ti
esandpr
eventt
heexpansi
onoft
rai
ninganddev
elopment

f
aci
l
iti
es.

❖ Pol
it
icalandsecur
it
ycondi
ti
onsi
nther
egi
onandLat
elegi
slat
ive

enf
orcementmeasur
esar
eal
way
sthr
eat
stoanyi
ndust
ryi
nIndi
a.
 I
DCO52,
000-
CRORELANDSCAM
I
tal
lbeganwhenI
DCOhadi
ssuesNOCsorNoObj
ect
ionCer
ti
fi
cat
est
o
many

i
ndust
ri
alhomes,
all
owi
ngt
hemortgagi
ngofl
andmeantf
ori
ndust
ri
al
pur
poses

t
ohappen,
wit
hanai
mtor
aisetheamountofI
NR52,
000Cr
,and
thr
ough

manybanksofreputethatt
oo,
int
heform ofl
oans.Odisha’
sindust
ry
minist
erDebiPrasadMishr
ahadsoughtafactualr
eportfr
om

I
ndust
ri
alI
nfr
ast
ruct
ureDev
elopmentCor
por
ati
on(
Idco)ont
heR52,
000-
cror
e

i
ndust
ri
all
andmortgagescam.
TheCompt r
oll
er&Audi
torGener
al
(CAG)ofIndi
ahadrappedI
dcofori
ssui
ng

ano-
obj
ect
ioncer
ti
fi
cat
e(NOC)t
oindust
ri
alhouses,
enabl
ingt
hem t
o

mortgageindust
ri
allandtoraiseR52,500-
croreloansfr
om var
ious
banks.I
dcoirr
egular
lyconfer
redmor t
gagerightsinthel
easedeeds
executedwith52

MoU(
memor
andum ofunder
standi
ng)basedand54non-
MoUbased
i
ndust
ries

whi
l
ehandi
ngov
erofpossessi
onof46,732.
894acr
esl
and,
even
thoughsuch

powerwasnotv
est
edwi
thI
dcobythestat
egov
ernment
.Idcowas
pul
ledupby

t
heaudi
torf
ori
rr
egul
arl
yissui
ngNOCst
o26MoUbasedi
ndust
ri
esf
or
mor
tgagi
ng13,
846.
23acr
esl
andi
nor
dert
orai
sel
oansf
rom f
inanci
al

i
nst
it
uti
ons.Basedont
heNOCsi
ssuedbyI
dco,
12compani
esav
ail
ed
l
oans

wor
thRs52,
423.
50crorebymortgagi
ng8,489.89acresl
andall
ott
edt
o
t
hem.Int
heyear2014,t
heindustr
iall
andmor t
gagescam ofI
NR
52,
000Crshookt he

st
atebadl
y,andanswer
swer
easkedbymany
.
CHAPTER-
4

Concl
usi
ons

&

Recommendat
ions
 4.
1CONCLUSI
ONS
Recentcor por
atef r
audsandt heout cryfort r
ansparencyandhonest yi n
reportinghavegivenrisetot woout comes.Fi r
st,f
orensi caccount ingskill
s
hav ebecomev erycrucialinuntangl i
ngthecompl icatedaccount i
ng
manoeuv r
esthathasuncl earf i
nancialstatement s.Second, publi
cdemand
forchangeandsubsequentr egulatoryactionhast ransf ormedCor porate
Gov ernance'
sscenar i
oacr ossthegl obe.Inf act,
bot htheset r
endshav ethe
commongoalofaddr essingt heinvestors’concernsaboutt het ransparent
fi
nanci alr
e-port
ingsy st
em.Thef ai
lureoft hecorporat ecommuni cation
structure,
ther
efore,hasmadet hef inancialcommuni tyr eal
izethat“thereis
agr eatneedforskill
edpr ofessionals

thatcani
dent
if
y,expose,
andpr
eventst
ruct
uralweaknessesi
nthr
eekey
areas:

poorcor
por
ategov
ernance,
flawedi
nter
nalcont
rol
s,andf
raudul
entf
inanci
al

st
atement
s.HenceCor
por
ateGov
ernance'
sfr
amewor
kneedst
obef
ir
stof
al
l

st
rengt
henedandt
heni
mpl
ement
ed.

•Di
ff
icul
ttodet
ectcol
lusi
on:Anot
herpoi
ntofconcer
nist
hei
ncr
easi
ng

col
l
usionbet
weent
heempl
oyeesofor
gani
zat
ionsandext
ernalpar
ti
es.
Col
lusi
on

canbedi
ff
icul
ttodet
ect
,andt
hismakesi
teasi
erf
orext
ernalpar
ti
est
o
steal

l
argeamount
squi
ckl
y.

•Bankst
hemostv
ulner
abl
e:I
ncr
easi
ngcasesoff
raudagai
nstbanksi
sa

wor
ryi
ngsi
gnf
oror
gani
zat
ionsandt
her
egul
ator
.

•Needf
ori
nvest
orst
obev
igi
lant
:Thel
argev
alueoff
raudcommi
tt
ed
agai
nst

i
nvestor
sisal
armi
ng.Al
thought
her
egul
atori
sconst
ant
lymandat
ing
r
egulati
ons

t
osaf
eguar
dinv
est
ors,
iti
sani
nvest
or’
sdut
ytocl
osel
yscr
eenadv
iser
sand

compani
esof
fer
ingabnor
mal
lyhi
ghr
etur
ns.
 4.
2RECOMMENDATI
ONS

Thefi
rstandmostsi
gni
fi
cantstepwhichcanbet akentor
educeoreli
minatewhitecol
lar
cri
meagainstmaj
orcompaniesandcorporat
ionsdealswi
thaccount
ingsystems.Major
companieshav
ecomplexfi
nancialr
eport
ingsystems.

Thepr
obl
em i
sthatempl
oyeeswi
thi
nthesemaj
orcor
por
ati
ons,
insomecases

ov eraper i
odofmanyy earswi l
ll
earnhowt hesy st
em wor ksandi dent i
fycri
tical
weaknesses andf l
awsi nthesystem.Asecondpr oblem isthatmaj orcompani esand
corporationshav etopur chasemanygoodsandser vices.I
nmanyi nstances,ifthepr i
ceof
agoodorser v
iceisrelat
ivel
ysmal l
,therearefewerst epsandl i
ttl
eov ersi
ghtfort hese
transactions.Majorcompani esandcor porati
onsmusti mplementmor estri
ngent
account i
ngcont rol
swhi cheffecti
vel
yt r
ackthedissemi nati
onoff undsf orsmal lerpurchase.
Compani esandcor porati
onsmusti mplementt hesamesy stem ofchecksandbal ancesfor
thepur chaseoflowerpr icedgoodsandser v
icesast heydof orthelargerfinancial
transactions.

Thelevelofapprov
almaychange,
obv i
ously,
aboardorpresi
dentofacorporat
ioncannotbeexpectedtosignoffonever
ylow
pricedgoodorserv
ice.Thatwouldcl
earl
ybeani nef
fi
cientandineff
ecti
veuseofti
meand
resources.

Atami
nimum gov
ernment
smustaccompl
isht
hef
oll
owi
ngi
nor
dert
obui
ldand

st
rengt
hent
heessent
iali
nfr
ast
ruct
ureneededt
ocombatwhi
tecol
l
arcr
ime;

1)I
dent
if
ytheThr
eat
;2)Under
standt
heWhi
teCol
larCr
imeEnv
ironment
;

3)AdoptSt
ri
ngentPenal
ti
es;
4)St
rengt
henComput
erSecur
it
ySy
stems;

5)St
rengt
henEmpl
oyeeScr
eeni
ng;
6)Sy
stemsEducat
ethePubl
ic;
7)Adoptbest

Account
ingPr
act
ices;
7)Requi
reMul
ti
pleVer
if
icat
ionf
orMonet
aryTr
ansf
ers.
Chapt
er-
5

BI
BLI
OGRAPHY

&WEBOLOGY
 BI
BLI
OGRAPHY&WEBOLOGY
•BOOKSREFEREDTO–
•TheSt
udyOfWhi
teCol
larCr
ime:Towar
dAReor
ient
ati
onI
nTheor
y

AndResear
ch-(
1964)
-

Ear
lR.Qui
nney

•TheLegalEnv
ironmentandWhi
teCol
larCr
ime-(
2008)(
Prev
ent
ive

Measur
esTaken)
-

JohnD.Gi
ll
,

Mar
kScot
t

•Whi
teCol
larCr
imesI
nIndi
a-(
2012)(
Whi
teCol
larCr
imesI
nIndi
a)-

G.Nagar
ajan,

Dr
.J.Khaj
aSher
if
f

•SomePer
sonal
it
yCor
rel
atesofBusi
nessWhi
te-
Col
larCr
ime-(
2006)(

Def
ini
ti
onOfWhi
teCol
larFr
aud)
-

Ger
har
dBl
ickl
eUni
ver
sit
yofBonn,
Ger
many,

Al
exanderSchl
egelUni
ver
sit
yofMai
nz,
Ger
many,

UweKl
einKPMGFr
ankf
urt
,Ger
many

❖WEBSI
TES/LI
NKSREFEREDTO-
❖ ht
tps:
//www.
googl
e.co.
in/

❖ ht
tps:
//www.
googl
e.co.
in/

❖ ht
tps:
//www.
resear
chgat
e.net
/publ
icat
ion/
274793696-
Cor
por
ate-
Cor
rupt

Cor
por
ateFr
aud-
By-
Ghol
am-
Hossei
n-Dav
ani

❖ htt
p:/
/www.
kahnl
it
win.
com/
blogs/
busi
ness-
blog/
the-
eff
ect
s-of
-whi
te-
col
lar
-
cr
ime-
on-
busi
ness-
today

❖ ht
tp:
//www.
huf
fi
ngt
onpost
.i
n/dev
angshu-
dat
ta/
ramal
inga-
raj
u-and-
the-

i
ncr
edi
ble-
stor
y-of
-i
ndi
as-
great
est
-whi
t/

❖ ht
tp:
//t
imesof
indi
a.i
ndi
ati
mes.
com/
busi
ness/
indi
a-busi
ness/
Mal
ly
a-bank-
l
oan-

f
raud-
case-
ED-
regi
ster
s-f
resh-
case/
art
icl
eshow/
53830147.
cms

❖ htt
p:/
/indi
anexpr
ess.
com/
art
icl
e/i
ndi
a/i
ndi
a-news-
indi
a/sunday
-st
ory
-
once-

upon-
a-t
ime-
ther
e-was-
a-ki
ng-
vij
ay-
mal
ly
a/

❖ ht
tp:
//www.
idco.
in/
2009/

❖ ht
tp:
//www.
fi
nanci
alexpr
ess.
com/
archi
ve/
odi
sha-
demands-
repor
t-
from-
i
dco-

on-
rs-
52000-
cr-
land-
scam/
1265244