Corporate fraud: CBI, CAG for strict oversight

Central Bureau of Investigation (CBI) director Ranjit Sinha on Tuesday blamed collective failure of regulatory oversight mechanism, including statutory auditors, for the rise in corporate fraud in recent years involving a whopping Rs 29,000 crore.

He said that commercial banks have reported 1.69 lakh cases of fraud involving an amount of Rs 29,910 crore as on March 31, 2013.

Public sector banks have cumulatively lost a massive sum of Rs 22,743 crore due to cheating and forgery in the three years ending March 2013 Sinha said while addressing a summit on corporate fraud organised by the Associated Chambers of Commerce and Industry of India here.

The scale and size of corporate frauds in India has zoomed in recent years with majority of the cases of fraud involving siphoning off funds by promoters, top management and defrauding the lenders or investors, Sinha said. He also highlighted sharp rise in non-performing assets (NPAs) of commercial banks.

Gross NPAs of the public banks was Rs 1,64,462 crore in March 2013 comprising 3.6 per cent of gross advances and are estimated to have grown further as on March 2014, he added.

Shashi Kant Sharma, Comptroller and Auditor General of India, who was also a key speaker at the summit, regretted that economic progress has thrown up a class of 'rent seekers'. He said that the CAG will continue to audit private companies and private public partnership projects in cases where revenue sharing with the government is involved. In a mature market economy where there is very little scope for manipulations and fudging, why should companies fear such audit if they have nothing to hide, he said.

Courtesy: Mail Today