Corporate fraud in India has grown both in size and number since 2008-09, when B. Ramalinga Raju of Satyam Computer Services Ltd confessed to have manipulated accounts by almost $1.5 billion. The number of swindles detected since then has increased significantly in number and value, from Rs.10,739 crore worth of frauds being reported in 2008 to Rs.1,38,074 crore in 2009. In 2010 and 2011, frauds worth Rs.30,403 crore and Rs.66,880 crore were reported, while in 2012, detected frauds added up to Rs.15,440 crore.
Part of it could be due to better oversight, according to the Thought Arbitrage Research Institute, a New Delhi think tank working in the areas of corporate governance.
Before 2009, the average size of frauds was about Rs.282 crore. With a number of high-profile and large frauds detected between 2009 and 2012, the average has risen to Rs.502 crore, an increase of around 80%. To be sure, barring a few exceptions, most swindles tend to be of low value, with 83% of those detected since 1997, being of amounts less than Rs.200 crore and 5% involving amounts greater than Rs.1,000 crore, said the study supported on data collection and primary analysis by Grant Thornton, a consultancy.
Contrary to common perception, the prevalence of fraud was evenly distributed among public and private companies, with siphoning off of funds being the most common method. Despite disclosure and corporate governance norms imposed on listed entities, 44% of the companies surveyed in the study where fraud was detected were listed on stock exchanges. In nearly two-thirds of these firms, promoters had a shareholding of more than 50%.