CORPORATE CRIMES

-Sneha L

Corporate Crimes are those crimes which are committed by the Corporate sector. It is not like
normal street crimes such as theft, dacoity, etc. It is indeed a much bigger and high profile crime,
committed by powerful people from the corporate sector. We don't even read much about these
kinds of crimes in the newspapers, or television or internet. However, in recent years with the
increase of the corporate sector, i.e. private companies, there have been an increase in corporate
crimes as well. In India, the condition is still better as compared to USA, because it has been
found that majority of the companies in USA are mostly indulged in corporate crimes. These
corporate crimes are highest in America. These are also called ‘white collar crimes’. It involves a
lot of money, most of the high officials of companies commit these kind of crimes, and it is very
difficult to catch these criminals. For a normal police, it is not possible for them to catch these
criminals and prove them guilty; technical, financial and legal experts are needed to catch these
criminals. Some of the examples of these crimes include bribery, messing up of stock market,
false advertising, hiding financial statements, fraud, money laundering, forgery, tax evasion,
intentionally false accounting, etc. These crimes takes place because of the greed of the
companies, corporations, employees of the companies.
In Inida, the most famous case till now is the Nirav Modi case, where Nirav Modi, a
businessman defrauded Punjab National Bank of thousands of crores of rupees. It is very
shocking that such a big nationalised bank was defrauded by such con men and it was possible
only because of the employees taking bribery. This case has not been resolved till now and the
concerned department, the Enforcement Directorate has not been able to catch these con men.
Like him, there must be many other corporate criminals who don't get caught. This case got wide
media attention and publicity because it was a very huge amount. There are many other
companies as well who indulge in such activities.
The Harshad Mehta case of 1992 shocked the entire country. It involved a fraud of around
Rs.4000 crore and is one of the biggest frauds perpetrated on the Indian stock market. In this
case, Harshad Mehta issued fake bank receipts, and used these fake receipts to get loan from
other banks. He got loans from banks and used these money in the stock market and received
profits. Later bank realised that they were in possession of fake receipts of no value. Nealy
Rs.4000 crores were defrauded from the banks. He came to be known as the ‘Big Bull’. Later
the CBI got involved and arrested Harshad Mehta, because of this case, many reforms took place
in India’s financial regulatory system. The Securities Laws (Amendments) Act was passed in
1995.
Vijay Mallya is one case where the Indian government is not able to do anything to him. Vijay
Mallya’s Kingfisher Airlines has a total debt of Rs.7000 crores, moreover it has an operational
loss of around Rs.1000 crores. Also, it owes hundred of crores to all its fuel suppliers and dues to
the Airport Authority of India. He took loans from many public sector and private sector banks.
Banks took 23% stake in Kingfisher Airlines, however the shares of the airline was much less
than it was expected. He could not repay the banks and it was a loss of public money as it was a
failed business. The CBI got evidence that established that Mallya had obtained loans by giving
misleading and factually incorrect information to banks, and by colluding with the bank officials.
He left India and his extradition from the United Kingdom is still awaited .
There is a lack of awareness and experts in this field, many people do not know about corporate
crimes and how to deal with such crimes as it is different from the traditional crimes. Mostly, the
upper class and the upper middle class o9f the society are the ones dealing with these kind of
crimes. The employees of the companies are the criminals as well as the victims. Some do it to
save their company, while many do it for greed and financial gains and personal issues. Many
big industrialists, businessmen, contractors, and politicians get involved in this. It is viewed as
less harmful than violent crimes as corporate crime involves money being abused and usually
capital markets crimes. It influences the capital market and has turned into a risk to the public.
The measures adopted to fight these crimes are not much as compared to the seriousness of the
crime, as it involves the nation, its people and the money of the public. Lack of adequate control
could also promote criminal behaviour. It has a huge effect on one’s social and economic lives.
As it affects the economy of the country, the growth of the economy gets disrupted.
In India, the authorities who look into these crimes are the Enforcement Directorate(ED), Central
Bureau of Investigation(CBI), Central Vigilance Commission. Not only in India, but the whole
world is facing this global issue of corporate crimes. It is a big challenge for the justice system as
well as the government to tackle these corporate crime in the country as it has many adverse
effects too. A corporation must not be headed by a greedy, profit driven person who only thinks
about financial gains and personal net worth, it must be headed by someone who has ideals and
principals; and also knowledge of such crimes and how to handle such kind of corporate crimes.
These criminals should never be taken lightly as it will have a bad impact on society and many
will try to imitate these criminals for the benefits of their corporations.
It is believed that all or majority of the corporations are involved in at least one of these crimes,
so the government and the concerned authorities need to hire more experts in financial legal and
technical departments so as to catch these white collar criminals of our society, who show a
different image in public, but in reality is a big criminal looting the taxpayers money.
Vijay Mallya, Harshad Mehta and Nirav Modi are just a few names who became popular because
of their wrongdoings, however there are many other popular businessmen who are also involved
in these crimes but are not yet caught, so their names are not out yet.
So far there is no international law for these crimes. This global phenomena must be controlled
by making an international law and international treaties so that criminals can be caught outside
our borders.