Corporate frauds in India are increasing and we need a sound techno legal strategy to handle the same. In fact, corporate fraud investigations in India need techno legal and holistic due diligence to be effective and successful. E-discovery and cyber forensics investigation are two of the most important aspects of a corporate frauds investigations in India.
E-discovery investigation includes areas like money laundering, corruption, financial frauds, cyber crimes, serious frauds and white collor crimes investigation, etc. Presently e-discovery services in India are in infancy stage and this is the reason why many cases of corporate frauds and cyber crimes remain unreported.
For instance, Airtel and Tata Teleservices Limited are violating Internet Intermediary rules of India as they have failed to observe cyber law due diligence in India. When such cyber crimes and cyber contraventions are committed by well established telecom companies like Tata and Airtel that means there is something seriously wrong with our telecom laws and policies. As a result corporate frauds and IT frauds have increased a lot in India.
To streamline he corporate environment, Indian government has enacted the Indian Companies Act, 2013 (PDF). The transfer pricing laws in India also need to be strengthened as many telecom companies have been avoiding payment of taxes due to inadequate transfer pricing laws of India.
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.
Corruption among corporate world has also necessitated use of e-discovery and cyber law due diligence by and against Indian companies. For instance, Indian and foreign corruption and technology related due diligences in India has gained importance. Corruption and the regulatory measures to prohibit corrupt practices have assumed new meaning with the passing of the Jan Lokpal and Lokayuktas Act, 2013 by the Parliament of India. Similarly, the Serious Frauds Investigation Office (SFIO) has also been given wide powers under Indian Companies Act, 2013.
As corporate frauds may spread over multiple jurisdictions, it is of vital importance that coordination among various national and international law enforcement agencies must be there. This is more so where a cyber crime investigation is in progress as digital evidence is very fragile in nature and it may be lost in no time. Keeping this in mind an Indo-American alert, watch and warn network for real time information sharing in cyber crime cases has been established. At the national level as well there must be coordination among the law enforcement agencies of various states of India.
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.