80% Indian firms saw corporate fraud last year, 25% reported corruption
Corporate fraud is on the rise worldwide - this is the crux of the Global Fraud Survey, 2015-16, conducted by the risk-mitigation consultancy Kroll and the Economist Intelligence Unit. Nearly 75% of the companies surveyed have fallen prey to fraud in the past year, up 14% from three years ago. India has one of the largest rates of corporate fraud in the world.
Here are some key findings from the report:
- Share of respondents who said their companies had witnessed an rise in fraud in 2015-16.
- Indian companies are "highly or moderately vulnerable" to fraud.
- Share of respondents who said that junior employees of their own company are "leading players" in fraud, including corruption, compliance breach and procurement irregularities.
- Despite this, only 285 of the companies surveyed invest in background checks of employees.
- Share of companies that reported cases of corruption, making India the nation with the highest incidence of corruption.
- Although only 8% of Indian companies reported money laundering, it's still more than in any other country.
- 20% of Indian companies reported regulatory breach while 15% reported intellectual property theft.
- Amount of private equity investment in India that is entangled in legal disputes.
- "Most disputes are triggered when private equity investors suspect fraud in a portfolio company," says Reshmi Khurana, Managing Director, Kroll India.
- Share of companies discouraged from operating in Latin America because of the risk of fraud.
- This is followed by Africa, where 22% of the companies are advised not to operate. In Central and Eastern Europe, 14% companies follow this policy.
More in Catch - Digvijaya alleges fraud in corporate loan restructures