Corporate Fraud
Corporate Fraud
Corporate fraud consists of activities undertaken by an individual or company that are done in a
dishonest or illegal manner, and are designed to give an advantage to the perpetrating individual
or company.
Kautilya’s Arthashastra maintains that for good governance, all administrators, including the
king were considered servants of the people. Good governance and stability were completely
linked. There is stability if leaders are responsive, accountable and removable. These tenets hold
good even today.
i) Raksha – literally means protection, in the corporate scenario it can be equated with
the risk management aspect.
ii) Vridhi – literally means growth, in the present day context can be equated to
stakeholder value enhancement.
iii) Palana – literally means maintenance/compliance, in the present day context it can be
equated to compliance to the law in letter and spirit.
iv) Yogakshama – literally means well being in Kautilya’s Arthashastra it is used in
context of a social security system. In the present day context it can be equated to
corporate social responsibility.
The substitution of the state with the corporation, the king with the CEO or the board of the
corporation, and the subjects with the shareholders, bring out the quintessence of corporate
governance, because central to the concept of corporate governance is the belief that public
good should be ahead of private good and that the corporation’s resources cannot be used for
personal benefit.
In one of the biggest frauds in India’s corporate history, B. Ramalinga Raju, founder and CEO of
Satyam Computers, India’s fourth-largest IT services firm, announced on January 7 that his
company had been falsifying its accounts for years, overstating revenues and inflating profits by
$1 billion. Ironically, Satyam means “truth” in Sanskrit, but Raju’s admission — accompanied
by his resignation — shows the company had been feeding investors, shareholders, clients and
employees a steady diet of asatyam (or untruth), at least regarding its financial performance.
Raju’s departure was followed by the resignation of Srinivas Vadlamani, Satyam’s chief
financial officer, and the appointment of Ram Mynampati as the interim CEO. In a press
conference held in Hyderabad on January 8, Mynampati told reporters that the company’s cash
position was “not encouraging” and that “our only aim at this time is to ensure that the business
continues.” A day later, media reports noted that Raju and his brother Rama (also a Satyam co-
founder) had been arrested — and the government of India disbanded Satyam’s board. Though
control of the company will pass into the hands of a new board, the government stopped short of
a bailout — it has not offered Satyam any funds. Meanwhile, a team of auditors from the
Securities and Exchange Board of India (SEBI), which regulates Indian public companies, has
begun an investigation into the fraud. Since Satyam’s stocks or American Depository Receipts
(ADRs) are listed on the Bombay Stock Exchange as well as the New York Stock Exchange,
international regulators could swing into action if they believe U.S. laws have been broken. At
least two U.S. law firms have filed class-action lawsuits against Satyam, but given the
company’s precarious finances, it is unclear how much money investors will be able to recover.
According to experts from Wharton and elsewhere, the Satyam debacle will have an enormous
impact on India’s business scene over the coming months. The possible disappearance of a top
IT services and outsourcing giant will reshape India’s IT landscape. Satyam could possibly be
sold — in fact, it had engaged Merrill Lynch to explore “strategic options,” but the investment
bank has withdrawn following the disclosure about the fraud. It is widely believed that rivals
such as HCL, Wipro and TCS could cherry pick the best clients and employees, effectively
hollowing out Satyam. Another possible impact could be on the trend of outsourcing to India,
since India’s IT firms handle sensitive financial information for some of the world’s largest
enterprises. The most significant questions, however, will be asked about corporate governance
in India, and whether other companies could follow Satyam’s Raju in revealing skeletons in their
own closets.
A special court under India’s Central Bureau of Investigation (CBI) on April 10 held the
founders and former officials of outsourcing firm, Satyam Computer Services, guilty in an
accounting scam worth Rs 7,000 crore ($1.1 billion). B Ramalinga Raju, the company’s former
chairman, has been sentenced to seven years in jail.
The case, which is also called the Enron of India, dates back to 2009. Six years ago, Raju wrote a
letter to the Securities and Exchange Board of India (SEBI) and his company’s shareholders,
admitting that he had manipulated the company’s earnings, and fooled investors. Nearly $1
billion—or 94% of the cash—on the books was fictitious.
In an immediate reaction to the confession, investors lost as much as Rs 14, 000 crore ($2.2
billion) as Satyam’s shares tanked.
Raju explained his reasons for inflating earning in the letter thus: “As the promoters held a small
percentage of equity, the concern was that poor performance would result in a takeover, thereby
exposing the gap.”
“What started as a marginal gap between actual operating profit and the one reflected in the
books of accounts continued to grow over the years,” Raju said in the letter. “It has attained
unmanageable proportions as the size of the company operations grew significantly.”
Raju was once the poster boy of India’s IT revolution—rubbing shoulders with top CEOs and
politicians across the world, including Bill Clinton.
1987: Thirty three-year-old Raju establishes Satyam Computer with his brother and a brother-in-
law in Hyderabad.
1991: The company is listed on the Bombay Stock Exchange, where its initial public offering is
oversubscribed by as much as 17 times.
1993: Satyam Computer signs a deal with US-based Dun & Bradstreet to set up Dun &
Bradstreet Satyam Software. Satyam holds 24% stake in the venture, while Dun & Bradstreet
holds the remaining. In 1996, Satyam sells its stake to Dun & Bradstreet, ahead of a
restructuring, and the new company is called Cognizant Technologies.
1999: Satyam Info way, a subsidiary of Satyam Computer, becomes the first Indian information
and communication technology company to be listed on Nasdaq, and Satyam expands footprint
to 30 countries.
2006: Satyam’s revenues cross $1 billion. Raju becomes the chairman of industry body, The
National Association of Software and Services Companies.
2007: Raju is named Ernst & Young Entrepreneur of the Year. The company bags contract to be
the official IT services provider of the FIFA World Cups in 2010 and 2014.
2008: Satyam’s revenues cross $2 billion. In December, the company decides to buy out Maytas
Infra—owned by Raju’s sons—for $1.6 billion. The deal falls through after investors and board
members object, and in a span of four days, four directors of the company quit. (Maytas is
Satyam spelt backwards.)
January 2009: Satyam is barred from doing business with the World Bank for eight years. The
World Bank alleges that Satyam was involved in data thefts and staff bribery. Shares fall to
record low in four years. Satyam employees receive a letter from Raju admitting to the fraud,
following which he resigns as chairman.
Raju and his younger brother B Rama Raju are arrested by police, while the Indian government
steps in and disbands Satyam board.
June 2009: Tech Mahindra, owned by the Mahindra Group, and Satyam merge to form India’s
fifth largest IT exports company. The merged entity is called Mahindra Satyam.
November 2011: Raju gets bail from India’s Supreme Court after the CBI fails to file charge-
sheet.
October 2013: India’s enforcement directorate files a charge-sheet against Raju and 212 others
under money-laundering charges.
July 2014: India’s market regulator SEBI bars Raju from the capital markets for 14 years, and
also seeks Rs 1,849 crore as fine.
April 2015: The special CBI court holds Raju and nine other officials guilty of cheating. Among
those held guilty are two former partners at PwC. “We are disappointed with this verdict given
by the court of the Additional Chief Metropolitan Magistrate at Hyderabad,” accounting firm
PwC said in a statement.
The 2G Scam
Mobile and allied networks work on specific frequencies allotted to each operator in a band of
frequencies known as a spectrum. . Any particular mobile network will operate only on the
frequencies it’s been allotted. The Government is responsible for such allocation. One such
allocation in the 2G network spectrum took place in India in the year 2008 under the ‘able
tutelage’ of the then Telecom Minister A. Raja, which today we all identify as the 2G spectrum
scam. The scam is so magnanimous that today, the TIME magazine lists it as the 2ndWorst
Abuse of Power right next to the Water Gate Scam of the United States. There are certain
pertinent facts about it which exactly show as to what the scam actually is all about.
One thing to be noted is that the loss of Rs. 1.76 Lakh Crore we hear, is the revenue that the
Government “would have” generated had it done proper auction of the spectrum frequencies
rather than it being a ‘loss’ in literal terms. Nevertheless, the exchequer is 1.76 lakh croreless
than what it should have been.
The first fallacy that came to light in the procedure of auction was the fact that the frequencies
were allotted in the year 2008 at prices supposed to be in the year 2001. In 2001, the customer
base of mobile phone companies was a mere 4 million, where in 2008, it grew to a staggering
350 million. It can be easily concluded that the basic loss that has been incurred has been through
this faulty and fraudulent auction. Taking example of two companies, one Unitech and the other
Swan Telecom. They were allotted frequencies at a paltry (yes, that’s what this amount of money
was) Rs. 1661 crore and Rs 1537 Crores respectively. And after this, these companies sold off
their 60% and 45 % shares at staggering Rs. 6200 Crores and Rs 4200 Crores.
This was only the first nail in the coffin. The number of deliberate inconsistencies that have been
played into this matter are alarmingly appalling. Next is the open way in which these companies
(there are a total of nine in number) were unduly favoured. The Government has been following
system of auction based on ‘first come, first serve’ policy ever since 1994 in the process of
allocation of resources this has been recently affirmed by the Supreme Court through its
Advisory Jurisdiction (Special Reference No.1 of 2012, 27th September 2012). This was
blatantly violated. There was a cut-off date till which the interested companies could apply for
licenses citing their particulars and other requisites. This date was preponed arbitrarily and the
website of the Department of Telecommunications (DoT) stated that those who applied between
the time 15:30hrs till 16:30hrs would be given the licenses. So the companies like Unitech and
Swan, who allegedly had a tip-off regarding the same amendment to the procedure, kept their
documents ready in line, and eventually got the licenses.
Both Unitech and Swan Telecommunications are companies without any prior experience and of
these, Swan could not even fulfil the eligibility criteria. But still, both were preferred.
The first question that comes to mind is as to what gratification did the then Telecommunications
Minister A. Raja get, and how?
The question is not yet answered as clearly and convincingly, but of what is known, he has been
said to have received a kickback, or bribe, in simple words, of Rs. 214 Crores. Now here comes
the role of Ms.Kanimozhi. She’s not in any telecom business, but owns around 80% of stake in
the channel Kalaignar TV, which inturn was used by Raja and his associates to route the money
that he was to obtain.
The entire conspiracy behind this scam, is only partly unfolded. A. Raja might just be a pawn in
the army of the lead conspirators. The myriad of millions that have been lost as a result cannot be
said to benefit only Raja. It is obvious that there are many more beneficiaries to this, though they
will remain under the veil, as they did during all other scams we have ever known, be it Bofors
or the Tatra Truck scam.
First there was Ketan Parekh. Then there was 2G. And then there were Satyam, Tatra, Saradha,
Sahara and countless others. Corruption has come to be viewed as an inevitable, if unfortunate,
cost of getting things done in India, and corporate and political panjandrums resolutely adhere to
this school of thought. This kind of large-scale fraud is aided by the strong political-corporate
nexus that exists in India. Market regulators like the Securities and Exchange Board of India
(SEBI) are ultimately powerless in exercising strict control over financial institutions due to
severe political pressure. This paper looks into the specific cases of the Sahara India investor
fraud case and the Saradha Group chit fund scam to reveal the nature of corporate scams in India,
their ethical implications and possible solutions.
On February 26, 2014, shock waves were felt through the country as the Supreme Court of India
sanctioned a non-bailable warrant for the arrest of Sahara India Pariwar Chairman Subrata Roy.
[1] This decision attracted attention for one major, unexpected reason. One would consider
investor fraud worth more than US $3 billion as incredulous under any circumstance, but
corporate scandals of this nature in India have lost their propensity to amaze. Indeed, what was
most surprising about this case was real consequences for the perpetrator, a rarity for corporate
crimes in India. Despite immense political pressure and the regulatory body’s own restrained
powers, the Securities and Exchange Board of India managed to secure a landmark victory after
an arduous, five-year battle against Sahara.
The Saradha Group scam of 2013 also saw as many as 1.7 million investors of a Ponzi scheme
lose approximately US $5 billion when it collapsed. [2] Unarguably, networks with high-ranking
politicians in the state government of West Bengal allowed the Ponzi scheme to stay afloat
undetected for as long as it did. Here, too, regulatory bodies like SEBI were blatantly disregarded
until the scheme went bust in April 2013. Complete with ineffectual regulatory bodies struggling
to have a voice and coercive political interests, the Sahara and Saradha scandals are the classic
examples of everything that makes corporate fraud in India possible.
Since 2009, when the Sahara Group’s activities first came under the radar of SEBI leading up to
the arrest of Sahara India Pariwar founder Subrata Roy in 2014, both parties have been engaged
in an aggressive regulatory conflict. SEBI alleged that Sahara India Real Estate Corp Ltd
(SIRECL) and Sahara Housing Investment Corp Ltd (SHICL), which issued Optional Fully
Convertible Debentures (OFCD), illegally collected investor money. [3] Meanwhile, Sahara
denied SEBI had any jurisdiction in the matter. [4]
SEBI went on to order Sahara to issue a full refund to its investors, which was challenged by
Sahara before the Securities Appellate Tribunal (SAT). [5] When the SAT upheld SEBI’s order,
Sahara moved to the Supreme Court in August 2012, which ordered Sahara to refund investors’
money by depositing it with SEBI. [6] Sahara then declared that most of the US $3.9 billion had
already been repaid to investors, save for a paltry US $840 million, which it handed over to
SEBI. [7] This was disputed by SEBI, which claimed that the details of the investors who were
refunded had not been provided. When Sahara failed to deposit the remaining money with SEBI
and Subrata Roy skipped his hearing, the Supreme Court of India issued an arrest warrant for the
Sahara chief in February 2014. [8]
Amid rumors of black money laundering and the misuse of political connections, Sahara
vehemently denied all charges and continued to defy SEBI. The regulator persevered through
what the Supreme Court referred to as the “ridiculous game of cat and mouse” and finally
managed to pin down Sahara chief Subrata Roy in 2014. [9] In this rare victory, SEBI not only
brought Sahara to justice, but also made an excellent case for why the regulator, and others like
it, require greater autonomy and penalizing powers.
India has been flooded with various Ponzi schemes that take advantage of unsuspecting investors
looking for alternate banking options. Lacking access to formal banks, low-income Indians often
rely on informal banking. These informal banks invariably consist of money lenders who charge
interest at inflated rates and were soon replaced by more sophisticated methods of conning
people through disguised Ponzi schemes. Fundraising is done through legal activities such as
collective investment schemes, non-convertible debentures and preference shares, as well as
illegally through hoax financial instruments such as fictitious ventures in construction and
tourism. The rapid spread of Ponzi schemes, especially in North India, has various causes, not
the least of which include the lack of awareness about banking norms, steadily falling interest
rates, lack of legal action against such activities, and the security of political patronage. [10]
The Ponzi scheme run by Saradha Group collected money from investors by issuing redeemable
bonds and secured debentures and promising incredulously high profits from reasonable
investments. [11] Local agents were hired throughout the state of West Bengal and given huge
cash payouts from investor deposits to expand quickly, eventually forming a conglomerate of
more than 200 companies. This syndicate was used to launder money and confuse regulators like
SEBI. In April 2013, the scheme collapsed completely causing a loss of approximately US $5
billion and bankrupting many of its low-income investors. [12]
SEBI first detected something suspicious in the group’s activities in 2009. It challenged Saradha
because the company had not complied with the Indian Companies Act, which requires any
company raising money from more than 50 investors to have a formal prospectus, and
categorical permission from SEBI, the market regulator. [13] The Saradha Group sought to
evade prosecution by expanding the number of companies, thus creating a convoluted web of
interconnected players. This created innumerable complications for SEBI, which labored to
investigate Saradha in spite of them. In 2012, Saradha decided to switch it up by resorting to
different fundraising activities, such as collective investment schemes (CIS) that were disguised
as tourism packages, real estate projects, and the like. [14] Many investors were duped into
investing in what they thought was a chit fund. This, too, was an attempt to get SEBI off its back,
as chit funds fall under the jurisdiction of the state government, not SEBI. [15] However, SEBI
managed to identify the group was not, in fact, raising capital through a chit fund scheme and
ordered Saradha to immediately stop its activities until cleared by SEBI. [16] SEBI had
previously warned the state government of West Bengal about Saradha Group’s hoax chit fund
activities in 2011 but to no avail. Both the government as well as Saradha generally ignored
SEBI until the company finally went bust in 2013.
After the scandal broke, an inquiry commission investigated the group, and a relief fund of
approximately US $90 million protected low-income investors. [17] In 2014, the Supreme Court
transferred all investigations in the Saradha case to the Central Bureau of Investigation (CBI)
amid allegations of political interference in the state-ordered investigation. [18]
Sahara is not unique in this sense. Many commentators proclaim that Subrata Roy would not
have had the nerve to ignore Supreme Court orders so blatantly if there were no political
reassurances given to him. [25] In June 2011, former SEBI member KM Abraham wrote a
whistle-blowing letter to Dr. Manmohan Singh, Prime Minister of India, blaming the Finance
Ministry for interference. [26] He claimed that then-Finance Minister Pranab Mukherjee and his
advisor, Omita Paul, were trying to force SEBI Chairman UK Sinha to “manage” high profile
cases, including Sahara, though this account was denied by the Finance Ministry as well as
Sinha.
The political interference in the Saradha Group case is more apparent. Several members of the
West Bengal ruling party, the Trinamool Congress (TMC), personally benefitted from the
scheme. For instance, there are many reports that suggest Sudipto Sen, Chairman of the Saradha
Group, bought paintings by Mamata Banerjee, the Chief Minister of West Bengal, whose
government later issued circulars to public libraries to display newspapers published by Saradha.
[27] Several Members of Parliament, such as Srinjoy Bose and Kunal Ghosh, were connected to
Saradha. Kunal Ghosh reportedly received a salary of over 1.5 million rupees (US$24,000) per
month from the Saradha Group. [28] In an 18-page confessional to the Central Bureau of
Investigation, Sudipto Sen admitted to illicitly paying huge sums of investor money to many
politicians. Among the few he named were Manoranjana Singh, wife of former Congress
member of Parliament Matang Singh, and Kunal Ghosh, whom he accused of blackmail. [29]
Many high profile personalities, including Transport Minister Madan Mitra and actor and TMC
member Satabdi Roy, publicly endorsed the Saradha Group. [30]
When we think of corporate fraud, there is a tendency to imagine it as an isolated event with no
real repercussions in our lives. We often look at the lofty numbers and associate the loss with an
abstract, theoretical entity. In reality, the financial costs of corporate scams have deep ethical
considerations and significant implications in our lives. The 2012 Global Fraud Study conducted
by the Association of Certified Fraud Examiners (ACFE) reviewed 1,388 incidents of fraud
worldwide and found that the average organization loses 5 percent of its annual revenue to fraud.
[31] This might not seem pertinent when set against the backdrop of each individual company.
However, looking at it in global context, it amounts to a projected annual fraud loss of US $3.5
trillion.
With a population of over 1.2 billion, more than 250 million people in India live in abject
poverty. [32] Corruption at the top and grassroots level is at an all-time high, and GDP growth
has slowed to 4.7 percent in 2014. [33] The Indian economy relies significantly on the corporate
sector, and the rising number of financial scams has pertinent ethical implications now more than
ever. The Sahara and Saradha Group scandals represent the antithesis of all business ethics.
Sahara, for one, has been convicted of wrongfully acquiring investor money without proper
authorization. Of course, there is the obvious issue of misrepresenting funding activities to
investors as well as SEBI, but that is simply the tip of the iceberg. There is widespread
speculation that the 40 million investors of the Sahara schemes were a front made up to hide
black money from influential donors. [34] It is hardly any secret that Sahara made it extremely
difficult for SEBI to track down investors, not only by sending a plethora of paperwork in 127
trucks for them to sift through, but also by refusing to refund the money to SEBI in the first
place. Indeed, SEBI has found that the documents Sahara provided do not provide sufficient,
verifiable information, and SEBI has heard back from less than 1 percent of the 20,000 investors
it contacted, with many addresses turning out to be invalid. [35]
Just as India is seeking to battle the scourge of corruption in its governance, it is being hit by a
spate of large-scale corporate corruption scandals, which have brought into sharp focus the role
of India’s corporate sector in the problem of corruption in India. In this context, to fix liability
for corruption and bribery offences, it becomes relevant to examine criminal liability, not just of
individual directors or agents of a corporation, but also of the company itself. The basic rule of
criminal liability revolves around the basic Latin maxim actus non facit reum, nisi mens sit rea. It
means that to make one liable it must be shown that act or omission has been done which was
forbidden by law and has been done with guilty mind. The Indian Penal Code, 1860 which,
although not exhaustive, is the general substantive criminal legislation of the land. It applies to
all persons having a certain territorial connection with India. Instances of Criminal liability of
Corporations can be found in Sections. 45, 63, 68, 70(5), 203, etc of the Indian Companies Act
wherein only the officials of the company are held liable and not the company itself; it is also
reflected through the Takeover Code. The various sections of the IPC that direct compulsory
imprisonment does not take a corporate into account since such a sanction cannot work against
the corporation.
These are the major statutes in their respective field that are devoid of necessary legal aspects.
On the other hand, law has also developed to an extent with regard to certain other statutes and
their respective penal provisions wherein a fine has been imposed on the corporations when they
are found to be guilty. Some such examples are:
Under statutory provisions of the Indian law, the liability prescribed, at least for economic or
strict liability offences committed by a company is threefold, as per the express provisions of the
statutes .Firstly, the person who was in charge of and was responsible to the company for the
conduct of its business is held liable, unless he can prove that the offence was committed without
his knowledge or despite his exercising due diligence to prevent the offence. Secondly, if it is
proved that an offence under such statutes has been committed “with the consent or connivance
of”, or is “attributable to” neglect on the part of a director, manager, secretary or “other officer”
of the company, such individual shall also be held liable. Lastly, the company of course, is held
liable, irrespective whether any individual is pinned with liability too. The law on corporate
criminal liability is however, not confined to the general criminal law in the penal code but it is,
in fact, scattered over a plethora of statutes with specific provisions for the same.
Mens rea is an essential element for majority, if not all, of offenses that would entail
imprisonment or other penalty for its violation. Zee Tele films Ltd. v. Sahara India Co. Corp.
Ltd., the court dismissed a complaint filed against Zee under Section 500 of the IPC. The
complaint alleged that Zee had telecasted a program based on falsehood and thereby defamed
Sahara India. The court held that mens rea was one of the essential elements of the offense of
criminal defamation and that a company could not have the requisite mens rea. Recently, the
Supreme Court of India, through a landmark judgment Iridium India Telecom Ltd v Motorola
Incorporated & ors, has added a new dimension to the jurisprudence relating to corporate
criminal liability in India with respect to offences requiring mens rea or criminal intent, holding
that despite being a legal fiction, a company can be said to possess mens rea required to commit
a crime. Further in India, Confusion prevails as to whether a company can be convicted for an
offence where the punishment prescribed by the statute is imprisonment and fine. However after
few cases, The 41st Law Commission gave a report suggesting amendment in the penal
provisions and providing for substitution of imprisonment with fine in case of offender being a
body corporate. But the authorities are, till date sitting on that report and no such changes have
been made to the penal legislation.
In Standard Chartered Bank & Others. Vs. Directorate of Enforcement and Others
appellant filed a writ petition before High Court Of Bombay challenging various notices issued
under section 50 read with section 51 of Foreign Exchange Regulation Act, 1973 & contended
that the appellant company was not liable to be prosecuted for an offence under section 56 of
FERA Act, 1973, against the decision of High Court appellant filed a special leave before
Supreme Court, contended that no criminal proceeding can be initiated against appellant
company under section 56(1) of FERA Act, 1973 as the minimum punishment prescribed under
section 6(1) (i) is imprisonment for a term which shall not be less than six months and with fine.
The court held that the legislative intent should be considered and all penal provisions should be
construed like all other statutes fairly to bring out the legislative intent expressed in the
enactment. The courts have followed this judgment and have denied any blanket immunity to
corporations from criminal liability. As Indian companies set to expand globally, with increasing
cross-border transactions and foreign investments, there is a need for them to be aware of the
extraterritorial reach of foreign anti-corruption legislations, and to implement adequate
compliance measures. In light of the growing power corporations in India today it has become
necessary to regulate the moral behavior of such corporations. As the influence of multinational
corporation’s increases, questions relating to their accountability are also raised more frequently
and hence accordingly law of Criminal liability of Corporations and such other has been evolved
by both judicial interpretation and legislation.
Tatra Scam
Tatra deal was signed around the same time as Bofors. Although Bofors scam was unearthed
within a few years, the Tatra defence scam continued to loot India for around 15 years until an
honest Chief of Staff of Indian army, General V K Singh raised it and tried to stop the loot. Top
officials of BEML Limited, a Bangalore-based company, and the defence ministry have siphoned
off at least Rs750 crore in bribes and commissions over the past 15 years in the purchase of
components for Tatra trucks, backbone of the army’s artillery and transportation wings.
While Rajiv Gandhi and VRS Natarajan is suspected of active involvement, Sonia Gandhi and
Antony is accused of trying to keep the scam under wraps and taking no action to stop the scam
even after brought to their notice.
Conclusion
At the end it can be concluded that, the world has become a borderless global village. The spirit
to implement internationally accepted norms of corporate governance standards found expression
in private sector, public sector and the Government thinking. The framework for corporate
governance is not only an important component affecting the long-term prosperity of companies,
but it is critical in terms of National Governance.
It is also to be noted that, in making ethics work in an organization it is important that there is
synergy between vision statement, mission statement, core values, general business principles
and code of ethics. A commitment by corporate management to follow an ethical code of
conduct confers a variety of benefits.