Fraudulent Corporate Transactions: Reworking Regulating Silos

Abstract

Recent times are witness to corporate frauds of various kinds and dimensions. They effect companies and financial entities of all size, sector and region and have taken for surprise the law enforcement agencies of the very advanced and developed economies as well as the developing or the developed ones, with high growth rate. Stringent penal provisions in the capitalist west was unable to contain the malaise of fraud. Post liberalization of the economy, the occurrence of corporate fraud has increased manifold in India. The regulations introduced often lagged behind the pace of corporate development. In fact, the system of regulating financial institutions in India was always highly fragmented, outdated and ineffective. It managed regulations with the help of multitude of agencies, self-regulatory organizations and state authorities who share oversight of the financial system under a sort of adhocism, often symptomatic of a framework uncomfortably saddled with gaps in regulatory silos, legal complexities and institutional inefficiencies.