Instances of corporate fraud like corruption, money laundering and bribery in India have risen substantially in the last few years, a survey has found. The survey by Grant Thornton and Assocham also observed that the lurking risk of frauds has been dissuading global companies from investing in India.
Specific types of frauds including corruption and bribery, siphoning-off funds, information theft, theft of physical assets and internal financial fraud have increased dramatically in India, the survey pointed out.
The survey also found that companies in the real estate & infrastructure sectors are the most vulnerable to fraud. Any action undertaken to conceal fact, deceive, injure the interests of the company or its stakeholders, or to gain undue advantage also constitutes fraud.
“Global companies are increasingly realising that corruption is the biggest threat to do business in India. As a result, they are investing in building up controls and processes that address the direct and indirect risks of corruption and bribery in India”.
“This means that Indian corporates that intend to do business with such global companies would have to invest significantly in ramping up their anti-corruption controls or else stand a chance to lose doing business with global companies,” said Vidya Rajarao, Partner, Grant Thornton India. The survey revealed that corruption, money laundering and/or bribery is the most common type of fraud that Indian corporates need to watch out for.