Corporate Fraud Investigations In India Need Techno Legal And Holistic Due Diligence

Corporate Fraud Investigations In India Need Techno Legal And Holistic Due DiligenceThe corporate world in India is passing through a transformation stage. There was an urgent need to rejuvenate the corporate culture and corporate accountability in India keeping in mind the increase in corporate frauds and white collor crimes in the corporate world.

There is no escape from the reality that white collar crimes and financial frauds are increasing in India. Further, IT and cyber frauds in Indian companies are increasing. By their very nature these high profile crimes affect corporate sector. Indian companies are also facing increased corporate frauds, financial frauds, white color crimes and technological frauds. Indian government reacted immediately and it formulated the under Indian Companies Act, 2013 (PDF).

The Ministry of Corporate Affairs (MCA) has also issued some Rules under Chapter XIV of Indian Companies Act, 2013 pertaining to Inspection, Inquiry and Investigation by Indian Authorities and Serious Frauds Investigation Office (SFIO). The Suggestions Regarding Rules Pertaining to Inspection, Inquiry and Investigation (SFIO) by Perry4Law (PDF) has already been provided by us in this regard. Now even the Central Government permission is not required by Central Bureau of Investigation (CBI) to prosecute senior bureaucrats for corruption cases monitored by Supreme Court of India.

Clearly the requirement to observe due diligence by various stakeholders, including Indian and foreign companies operating in India, has tremendously increased. However, the traditional due diligence has failed to bring appropriate results in India as is evident from numerous white collor crimes, financial frauds and corporate frauds that have resurfaced recently.

It is high time to think out of the box and deliver something that is not only novel but is also effective. A more comprehensive and holistic techno legal due diligence for Indian Companies is need of the hour. Due diligence these days is effectively techno legal in nature as it requires both technological and legal issues to be considered. Either technical or legal due diligence would not be sufficient in the present corporate environment.

Any player who is involved in investigation of some of the recently committed corporate frauds and fraud in portfolio companies must admit that perpetrators often cover their tracks with false documentation and transactions that appear genuine and do not raise alarms in the pre-investment review. Therefore there is an urgent need for much tougher due diligence process that cannot be achieved till it is techno legal in nature.

A techno legal due diligence would also ensure cooperation and synchronisation between different due diligence elements so that problems can be fully unravelled and investigated. For instance, analysing internal and external evidence closely and simultaneously in a holistic and techno legal manner is much more beneficial for various stakeholders than relying on stand-alone analysis.

Perry4Law has been managing the techno legal due diligence and corporate frauds investigation for long. Our techno legal services also include cyber crime investigation, cyber forensics services, e-discovery services, cyber security due diligence services, e-commerce compliances, etc.

With a decade of techno legal experience that we have obtained, we firmly believe that corporate fraud investigations in India need techno legal and holistic due diligence. Indian government must make suitable arrangements so that techno legal due diligence becomes essential part of the corporate governance of India.

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  1. Pingback: E-Discovery And Cyber Law Due Diligence Required For Indian Companies | Techno Legal E-Discovery Services In India

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