Prevention and Control of Corporate Frauds- A Socio-Legal Study of Financial Market in India

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About the Book In this book an attempt has been made to understand the problem of corporate fraud from legal and social point of view in India. This book covers the concept of corporate Governance, its importance, Various securities dealt in the financial market, various legislation and authority relating to financial market, corporate frauds ,reason for these frauds etc.

Moreover the role of various' authority in preventing corporate frauds is analyzed critically in the present work. At the end, some important conclusion derived from the study and certain meaningful" realistic and practicable suggestions are also incorporated.

This book will prove to be an asset for students, academicians, lawyer and judges and others who have an interest in corporate world.

About the Author Dr. Rinku has joined the C.R. Institute of law, Rohtak (Haryana) as an assistant Prof in law in the year 2013. She was awarded the degree of LL.M in 2010 by G.G.I.S.P. University, Delhi. Later on she was conferred the Degree of Ph.D. by M.D.V. Rohtak in 2015. She is specialized in corporate Law. She has attended a number of Seminars and conferences. She has also contributed 11 research papers in international journal so far.

Preface Everyone is aware of importance of corporate world for the development of country. So for the development of country it is necessary that. there should be transparency and accountability in the corporate sector. So that investors attract toward this sector and invest their money.

Unfortunately Indian corporate sector suffers scarcity of finance. Common man is not investing their money in corporate.

He feels that his money is secure in bank and not in corporate world. The reason for this is corporate frauds. Every year a new fraud is revealing, It appears that companies have competition for committing frauds. These frauds affect whole of society and especially common people.

No doubt we have a lot of legislations and regulating authority still frauds are rampant in India. Here the author has studied the various cases, laws, role of regulating authorities and highlighted the various loopholes in the system and make suggestions to prevent frauds and attracting investor for investing their money. The study has been divided into 7 chapters.

CHAPTER-I as conventionally, deals with the Introduction.

CHAPTER-II Describe the Corporate Governance and its need in present scenario and Report of Various Committee on Corporate governance and what is need and object of corporate Governance and its importance for preventing corporate fraud. When there would be Good corporate Governance there would not be any fraud.

CHAPTER-III Deals with Corporate Securities in corporate dealt by various participants. The corporate fraud is committed in respect of security. Without defining corporate Securities the Book would be a kite without its string. So the chapter defines the various types of securities and their advantage and disadvantage and the difference between these securities and which type of risk is attached to the security.

CHAPTER-IV Deals with Corporate Frauds in India. The chapter gives an overview of various frauds committed in India and reasons for these frauds and their effect upon the society. This chapter defines how the corporate fraud affects the whole society and why the common people try to avoid investing their money in market.

CHAPTER-V Deals with Financial Markets in India. It defines what are the factors which affect the financial Market. This chapter also defines Primary Market, Secondary Market their difference, listing of Securities and what the advantage of this listing is. It also defines derivates Market and Government security and importance of financial market in India.

CHAPTER- VI deals with Legislations and Regulatory Bodies for Prevention of Corporate Frauds in India. The reasons for the enactment of this act and its implementation and various authorities constituted under the act for preventing corporate frauds and their roles in corporate world.

CHAPTER- VII deals with Conclusion and Suggestions. Since attempt to present a clear picture of the research subject cannot be said to be complete without identifying the challenges to that field and the suggestion to overcome the deficiencies. I have made this humble effort to enlist few purposeful and relevant suggestions which emerged out of the analysis in previous chapter and finally in conclusion.

Introduction Today everyone is talking about good corporate Governance. No one in corporate world will deny its existence. Good corporate governance ensures transparency and accountability and ensures effective investment in corporate world. This Topic was not in Vocabulary a few years ago. Governance implies a degree of control to be exercised by every Stakeholders representative.

Governance is merely Governing. It is not merely ownership. Even an owner has to govern. Good Governance implies that the institution is run for the optimal benefit of stakeholder in it. It attempts to remove corporate failures and dissatisfaction of its stakeholders. In the modern era of liberalization and globalization, corporate governance plays an important role. Since reliance on corporate sector has increased, it led to greater concern on how corporations operate and control and how supplies of fund are assured of fair return on their investments. Corporate governance aims to' achieve balance between all interests present in corporations: management, shareholders and other stakeholders.

The corporate governance frameworks ensure that timely and accurate disclosure is made on all material matter regarding the corporation, including the financial situation, performance and ownership. It ensure that corporate managers run their successfully and take care of long term interests of their stakeholders. It improves capital efficiency of companies and attempt to deploy their wealth in productive areas of economy.

As ownership of a company is distributed amongst a large number of shareholders. Majority of who hold a small percentage of company's capital, the company is managed by the elected board of directors and the chairperson who, with the help of managers and employees of firm look after interests of the company stakeholders. The top level managers have the prime responsibility to use organization's resource with commitment and dedication to ensure organizational success.

The word corporate Governance is not just Corporate Management. It is something much broader to include a fair, efficient, accountable, transparent administration to meet certain well defined, objectives. It is a system of structuring, operating and controlling a company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers, and complying with the legal and regulatory requirements, apart from meeting environmental and local needs I. It includes the law governing the formation of firms, the structure of firms. The corporate governance structure defines the rights, responsibility of three groups of participants - The Board of directors, managers and shareholders. Corporate governance lays down the rules and procedure for making decision on corporate affairs", It also provides the structure through which the company objectives are set. The fundamental object of corporate governance is to ensure the conditions whereby a company directors and management act in Interests of the firm and its shareholders, and to ensure the means by which managers are held accountable to capital providers for the use of assets'.

Whereas corporate management deals with the management (Planning, organizing, etc) of corporate enterprises with in a framework of its governance. It deals with the use of corporate resources so that maximum value addition is made to corporate wealth within broad parameters defined in corporate governance.

Book's Contents and Sample Pages