Corporate Fraud: Analysing Preventive Measures Under Indian Law
- IJLLR Journal
- Feb 27
- 2 min read
Dr. Kunal Shaktawat, Oriental University, Indore (MP)
ABSTRACT
Corporate fraud not only impacts the financial stability but also effects various traders, investors, shareholders and puts a negative impact upon the corporate governance of India. The various negative impact of corporate fraud is the loss in the finances, losing the confidence of the investors, many of the employees may also loose moral, facing of legal consequences by the company and most importantly damage caused to the reputation of the company. Although, in India there are laws that govern for the same as The Companies Act 2013, Indian Penal Code 1860, Prevention of Money Laundering Act, 2002, SEBI Act 1992 etc. But then also there are rising cases of corporate fraud that not only effects the company but also to the economic market in the society. This paper analysis legal mechanism that are designed for the prevention of various corporate fraud. Further it highlights the cases that have emerged in the society and caused great impact upon the financial market. It explores the main legislative provisions, the function of investigative and regulatory institutions such as the Serious Fraud Investigation Office (SFIO), the Securities and Exchange Board of India (SEBI), and the Enforcement Directorate (ED), and the procedures that are followed in the prosecution of these cases. Through a combination of doctrinal legal analysis, case studies, and comparative insights from global practices, the study finds gaps in legal enforcement, lack of corporate accountability, and procedural inefficiencies that forbids timely justice. Further, the paper focuses upon the importance of corporate governance tools such as independent auditing, whistleblower protection, and internal compliance mechanisms in prevention of fraud at an organizational place. By examining both statutory and non-statutory safeguards, the research ultimately gives a set of reforms aimed at improving transparency, aiming at better compliance, and developing an ethical corporate culture that aligns with global framework.
Keywords: SEBI- Securities Exchange Board of India ED- Enforcement Directorate PMLA- Prevention of Money Laundering Act FDA- Foreign Development Authority BR- Bank Receipt
