Exploring Corporate Frauds In India

In the business world, corporate fraud is emerging as a threat that damages brand names, the economy, and investor trust. As the corporate sector is rising in India, Instances of fraud and illegal activities have risen. Due to these illegal activities, several financial losses have been reported recently. Therefore, it becomes tough for an investor to invest their money in corporate firms. In this blog, we will talk about the biggest corporate frauds in India and its consequences. We will also discuss the measures to tackle corporate scams in India.

What Is Corporate Fraud?

Corporate fraud is a deceptive act taken by an organization or workers to gain financial support and unfair advantages. This kind of act misleads investors and is dangerous to their money. Corporate fraud has many forms like

  • Bribery
  • Embezzlement
  • Insider Trading
  • Records Falsification

These acts lead to financial loss for investors, reputational damage, legal penalties, bankruptcy, etc. 

List of Corporate Frauds In India

After discussing corporate fraud and its risks, let’s examine the major corporate scams in India.

Satyam Computer

Satyam Computer is one of the biggest corporate frauds in India and its fraud history. It was famous as the Indian Enron fraud case. It was similar to the USA fraud cases caused by Enron and Lehman Brothers. The Founder of Satyam Computer, Ramalinga Raju confessed to creating a company’s revenue figure bigger than $1.47 billion than the real. After detection of this scam, the company went into a downfall.

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Impact Of Satyam Computer Fraud

Investors faced financial losses and a sharp decline in the stock market. Ramalinga Raju and his partner in scams (brother) faced legal punishment and imprisonment. People involved in this fraud faced legal action.

IL&FS Financial Scandal

ILFS is another known corporate frauds in India that has shaken the Indian economic system. This company accumulated a debt of around $12 billion. The top management in charge of this company takes illegal means like giving money to their friends, over-invoicing of projects, showing fake expenses, overestimation of revenue, and owning several other companies. The top members of this company take money as their personal property. Due to this, the company suffered a downfall.

Impact Of ILFS Scam

The decline of IL&FS adversely affected India’s construction projects, leading to delays and disruptions. The Indian Government took measures to solve the issue by replacing top members. The company was handed over to Safe Hands for its re-evaluation.

As a result of this scam, RBI and SEBI implemented measures to combat fraud. After that, they started to look seriously at the NBFCs.

Nirav Modi PNB Scam

PNB fraud is one of the biggest and most popular corporate frauds in India. Nirav Modi and Mehul Choski perpetrated a fraud worth over 16,000 crores using the inability of the system to recognize the Legit of Credit. They have many outlets of diamonds in India. They have a good public relationship. So, no one suspects them and they tricked PNB. PNB fraud happened due to the ignorance of the bank manager and regulators. Even the RBI notified the bank to keep track. 

Impact of Nirav Modi PNB Scam

The PNB corporate fraud in India serves as a warning to people and banks, highlighting the ease with which fraud can occur. Banks should have to focus on the regulation and manage things carefully. Nirav Modi was arrested in the UK. Other people who participated in the scam faced legal action.


LNS IFS Scam is a biggest scam that occurred in Chennai of rupees 6000 crores. This company has collected lakhs of money from the promise of giving 8% profit a month. This company lends money to the people at 2% interest. Around 1 lakh people faced fraud by investing in this firm and lost their money. This fraud took several people money cause committing suicide to some. It was considered as the corporate frauds in India in recent times, in which people lust towards becoming rich make them victims.

Sahara India Scam

The Sahara India scam is renowned and comes at the top of corporate scams in India. It has two companies, both of which raised funds as unsecured loans. This case was a long battle between Sahara and SEBI. 

However, the Supreme Court helped and ordered Sahara to return money to the investors. After this case, SEBI and other regulators got alerts to do financial deals carefully and prevent losses.

How To Prevent Corporate Frauds in India?

Preventing Corporate fraud is not an easy task, it needs many approaches and people’s involvement. An Auditor is an essential component in tracking the record of finances and expenses of the company. Whistleblowers are also important in preventing fraud. They uncover the frauds of companies.

Incorporation of technology like AI, data analytics, and machine learning. They are capable of finding uneasiness and anomalies in finances and transactions

Regulatory bodies like RBI and SEBI must establish stringent regulations to prevent new fraud schemes. So, criminals and people involved in fraud get tough punishment.

Companies should have strong corporate governance. Companies should have many regulatory bodies so one person can’t rule and make decisions. Transparency in finances, expenses, and transactions is mandatory. These measures will help in preventing further Corporate scams in India.


What Are The Biggest Frauds In India?

Biggest corporate frauds in India> Satyam computer scam> ILFS scam> Nirav Modi PNB Scam> Sahara India Scam> ifs scam etc.

What Is The Contemporary Scenario Of Corporate Frauds In India?

Corporate Scams in India are continuously occurring despite making many efforts to stop them. Regulators are working on better oversight. But new fraud tactics make it complex. Maybe Incorporating technology will be beneficial in detecting fraud at the right time.

Utilize Surepass API In Your Organization Before Hiring

After reading the above blog, you have found that many people and employees have involvement in Financial Scams. So, it is a must for a business to check the background of potential talent. Use Surepass APIs like background check API and criminal record checks API. Our API ensures you hire genuine and safe talent for your organization. It will help to keep you away from financial losses and reputational damages.

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