Corporate crime and its role in economic depression
Authored By : Pallavi Barwar
The research work on done with a motive to gain some knowledge about corporate crimes in the corporate world that has become the issue of major concern both at national and at international level. This article is a brief of what it is, how it has evolved, and what it leads to. Along with this some solution and the behaviour of judiciary in this matter are also mentioned.
Corporate crimes, Companies, Regulation, economy.
Corporate crimes are also called the white-collar crimes that are becoming very prominent in the economic world. These can be defined as the crimes done by the individual of highly recognized position for financial gains and personal satisfaction and they do so because they get the opportunities to get indulged in the activities because of their highly recognized designation. And this breach of trust, corruptions, personal interest brings a loophole in the system in form of Corporate crimes.
The Australian criminologist John Braithwaite defined corporate crime as "the conduct of a corporation or employees acting on behalf of a corporation, which is proscribed and punishable by law.
On the other hand, these are the crimes done by the individuals within their legitimate occupations .There can be two broad categories of corporate crimes: one in which the employees of the company commits something acceptable and the second in which the company is wrong in itself. Things like fake offers, money laundering, hackings, privacy theft, environmental destruction all come under corporate crimes. And since these crimes emerge from the corporate world then they are also regulated by corporate laws.
What are the causes of corporate crimes?
No realizable: some people commit these crimes in a view that they are committing these crimes because of problems and necessity and also give their justification as the government regulation can't understand the problems in practical life.
No awareness: most of the people in the corporate world are not aware of the crimes that occur in this type because they are different from the crimes we heard in the daily world and therefore due to lack of awareness they do commit something illegal.
Greediness: humans never get satisfied with what they get. They try to earn or get more and more in whichever way it's possible. And due to this, the financially stable workers indulge in unfair activates that lead to corporate crimes.
Types and some major corporate frauds :
There are various types of corporate crimes like financial frauds, fake information to customers, corruption, assets misappropriation, and many more. Some of the major corporate frauds are
1. East India Company: The employees of East India Company were working for the British crown but the officials focused on their financial benefits. the company used the unethical practices like economic theft and bribes to achieve their motive. And when in l700 the governor-general brought up this matter the company was wound up.
2. Mundhra Scam :This is also known as the first scam of independent India. Under this scam happened in the period of prime minister Jawaharlal Nehru when Harridans Mundhra, a big businessman committed fraud by selling some factious share to LIC company. When the case was heard and finalized he was imprisoned for 22 years.
Corporate crime and economic depression :
Due to the advancement in all the sectors of the economy the rate of corporate crime also has multiplied in the developing or developed countries. In the current scenario, it is highly recommended to formulate the policies and regulations. the crimes have increased the rate of corruption in the economy and have increased a lot this in turn is giving a negative effect on the country's economy that if become verse will lead to the situation of economic depression in the company.
Judicial interpretation and solutions :
The government brought Fugitive Economic Offender Bill to address or to cover up the lacking in the previous law.it has motivated the authorities to bring the matters related to economic offenders in corporate crimes in light. Under the ordinance special forum has been created inside as well as outside the country that will cover the matters up to Rs 1 billion.
The judiciary in 1986 implemented The Prohibition of Corruption Act, 1986 in the matters related to corruption. Many cases are there in this section related to public fraud and other corporate crimes like Vineet Narain v. Union of India and Subramanian v. Dr, Manmohan Singh a dJyalata Vs. Union of India.
Firstly, Since most of the matters in corporate crime are related to money then a certain amount of fine should be kept for the offenders as a sort of punishment to them. Secondly, expected benefits must be given to the victim to bring him back in its original position. Thirdly, punishments like jail imprisonment must be encouraged because they have a long time effect on society as well as on the individual. Furthermore, when the court took necessary steps for dissolution of the corporation, no rights so that shareholders and directors should not reincorporate.But the most essential element to solve this problem is to strengthen the legislature to make efficient and effective decisions and the imprisonment should be encouraged.
Corporate crimes are, in my view, the things that arise most in society. They are an unexpected risk to the economy and the capital market f any country. These are most of the time performed by the highly profiled individuals and it becomes difficult to punish them because of their connections. Therefore, effective legislation is required to deal with such problems and to cover the loopholes in the system. The issue has brought global attention and various measures at the global level are being taken by various authorities to curb the problem. Many steps have been taken by the Indians. Government to deter this form of crime in India. The Government of India has some frameworks in place to control the frauds under Companies Act 2013.
 complab-19. “A Study on Corporate Crime in India.” Ijlmh, complab-19, 4 June 2019, www.ijlmh.com/wp-content/uploads/2019/04/A-Study-on-Corporate-Crime-in-India.pdf.