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[March 10, 2014]
Is corporate fraud a menace waiting to erupt? [Asian News International]
(Asian News International Via Acquire Media NewsEdge) New Delhi, Mar.10 (ANI): An impressive degree and a sharp mind can be lethal tools in today's corporate world. Add to these, a mentality that has little or no care for 'code of conduct' and, you have a potent enough concoction to disturb an organization's fabric.
Few can forget the Rs.10, 000 crore Satyam Computer Services accounting scam; the alleged financial irregularities and unethical accounting practices associated with Reebok and IBM India respectively.
But, these are just tips of the iceberg incidents in the shady world of corporate fraud. They represent fraud by individuals or group of individuals who conceal and reveal sensitive data or information that not only proves detrimental to the company at large, but provides huge financial rewards to the person perpetrating such acts of deceit.
These smart men, driven by the scent of money, use their position of power to award contracts to favoured entities through dubious channels, fudge accounts and manipulate an established corporate system for personal gain.
Deception, whether at a lower or higher level, is rampant, but checks and balances are almost always found wanting.
Most frauds take place when monitoring controls fail to detect deviations from set processes or patterns. Experts insist on strategies and systems to make companies less vulnerable to fraud.
Around 90 percent of fraud originates from within a corporate entity, making it all the more challenging and difficult to detect. And, just because a majority of incidents fail to make headlines, doesn't by any stretch of imagination, mean corporate fraud has taken a break. It is always lurking around.
The rationale behind corporate houses unwilling to report cases of fraud is that image-wise, it reflects badly on them. After all, who wants shareholders to know about illicit deals, the siphoning off of funds, information leaks and insider trading? However, there is always someone with an agenda to expose transgressions.
A case in point is the Nasdaq-listed CA Technologies, which reportedly has been dealing with problems of their own.
Speaking on condition of anonymity, a source revealed that the reputed IT firm conducted an internal audit and investigation against Tarun Singhal, Director of Sales, who was charged with allegations related to a Scheduled Service Desk (SD) renewal between CA Canada and TATA in the third week of January 2014.
It is reportedly being alleged that communications of Canada may have been inappropriately converted into NCV (No Commercial Value) by members of the India sales team, headed by Singhal when they closed the March 2013 deal with TCL (the parent company of TATA).
It has been alleged that Singhal failed to exhibit honest and transparent behaviour in his interaction with CA Canada, resulting in a huge revenue loss to CA Inc. He is alleged to have withheld key e-mails from the top management and failed to provide satisfactory answers to the compliance unit.
Singhal's vehement denial to these charges did not help his cause, as he was asked to leave the company.
Interestingly, it is also reportedly alleged that Singhal bagged IT contracts from Bharti Airtel on behalf of CA Technologies when Jai Menon, former CIO and Bharti Airtel's Director of Global Innovation and IT, was calling the shots.
Menon, facing internal investigations himself, left Bharti in unceremonious circumstances.
According to sources, Singhal later arranged a trip to Dubai for Menon and his family. Interestingly, he has also coordinated payments to banks for the purchase of properties on behalf of Menon. Whether he paid some portion of this from his own pocket still reportedly needs to be ascertained.
The Serious Fraud Investigation Office (SFIO), the country's corporate fraud investigation body, also needs to up the ante in providing guidelines to companies designed to ensure least possibility of breaches of code of conduct. (ANI) (c) 2014 aninews.in All rights reserved. Provided by Syndigate.info, an Albawaba.com company
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