Abstract

Corporate fraud is a business risk which ultimately leads to death of the company. According to recent Economic Times, one out of five top executives of global corporations are apprehensive of investing in India because of concerns around frauds said Global Fraud and Risk Survey for 2016 published by Kroll, a global risk solutions provider . Corporate fraud is one of the major reason for discouraging foreign investors to invest in India. In corporate fraud generally top key managerial persons, accounting heads are involved for fund diversion. Corporate fraud encompasses wide area of fraud in private companies, public companies, government companies, public sector undertakings etc. This research is limited to a class of corporate fraud i.e capital market fraud. After Satyam in 2008, Kingfisher, Sahara, Sharada scams have created havoc in capital market. Investors are hysterical to invest in capital market. Despite of numerous SEBI and Companies Act, 2013 legislation, regulation, rules, circulars, notifications it is difficult to prevent fraud in capital market. Anticipating similar kinds of frauds every time SEBI plays an active role in promulgating new regulation, rules, notification to prevent such scams in future. The companies always outsmart such legislation, regulations etc. to commit corporate fraud. The companies should set boundaries of their own to prevent corporate fraud. In the era of transparency and accountability the investors should be assured to make a well informed investment. The real cause of corporate fraud is information based on which the fraud is organized by the companies which the regulators fail to anticipate.

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