Expressing concern over the growing frauds in the corporate sector, Comptroller and Auditor General (CAG) Shashi Kant Sharma said “these incidents are undeniable reality in our economy; there should be constant vigil against fraudsters”.
Addressing a seminar here, Sharma said the recent Supreme Court verdict was landmark one and has removed, once for all, the doubts on the constitutional mandate to audit private firms by the CAG so far as it relates to revenue sharing with the Government.
“Corporate fraud would remain an undeniable reality of our economy, especially as financial growth picks up pace and provides more avenues for both entrepreneurs and fraudsters. Fundamentally, both businessmen and fraudsters are tempted to their acts for the same reason: to make money. While honest businessman would try to make money through entrepreneurial ways, the fraudster would try to make money through dishonest criminal acts. While we need to applaud and support the honest entrepreneur, it is also equally important for us to be on constant vigil against fraudsters. Fraud should be distinguished from error. The distinguishing factor between fraud and error is whether the underlying action is intentional or unintentional.
“However, in the present economic scenario, where government has gradually withdrawn from several economic activities and handing over those responsibilities to private sector, the very concept of corporate fraud, has to be expanded to understand what we are dealing with. And why is it so crucial for us to be awake to the complex realities of corporate fraud, be it by a devious individual or by companies that aim to manipulate our regulatory frameworks and market dynamics,” said Sharma.
CAG said the audits on 2G, Coal Block allocation, irregularities in Delhi Airpot, KG Basin reveled a pattern of “private players trying to distort competition, upset free market fairness, and, cause loss to both public exchequer and competitors.”
“I urge the captains of industry to appreciate the fact that Indian economy has to grow into a mature market economy, which would present opportunities to maximise your profits and help you expand across the globe with confidence and credibility. I am certain that you wouldn’t want to be known as lynchpins of a crony capitalist economy,” said Sharma.