An Analysis of Recent Corporate Frauds in India and USA and their Nexus with Corporate Governance

Corporate fraud not only tarnishes the country's image and business, but it also has serious consequences for stakeholders, the stock, the company's employees, investors, and shareholders. "Fraud" is defined under various laws in India and the USA, which includes intentional fraudulent activities, not in consonance with corporate governance principles. In recent years, the world has witnessed an exponential growth of businesses as the world economy opened and ease of doing business was given utmost priority by the legislative branch, which focused on more attractive laws to create business opportunities but forgot about the aftermaths of a fraud which could happen and had no laws to prevent it. This paper focuses on 4 cases, i.e., the Kingfisher Airlines, YES Bank fraud, the Bernie Madoff Ponzi Scheme, and the Theranos Scandal. Corporate governance is a key component of how businesses operate. Poor corporate governance may lead to the demise of even the most profitable businesses. In India, The Satyam Scandal was the turning point in the Indian corporate governance regime. Various bodies like the SEBI have produced codes and rules on Corporate Governance from time to time, in addition to numerous acts and recommendations issued by various regulators. Meanwhile, in the USA, the Enron Scandal led to the "Sarbanes-Oxley Act," something that reflected shareholder protection from both a political and economic standpoint. For a good corporate governance regime in a corporation, the board of directors must meet regularly, sustain control over the company, be clear about their duties and obligations, and keep track of risk. Scandals and fraud are more likely to arise when directors and top management are not forced to follow a certain governance code. A better compliance mechanism by regulatory bodies, as we can see, what we have currently is not sufficient. The focus should shift from only investor protection to all stakeholders' protections, and an exclusive Corporate Governance code should be implemented.