New Delhi HISTORICAL FACTS:
• 5,300 year old civilization
• Key contributions:
oThe number “0” ; decimal system; value of pi
oChess; calculus, algebra and trigonometry
oFirst university – founded in 700 BC
• Privatization, liberalization and globalization started in
1991
• India has never invaded another country
“We owe a lot to the
Indians, who taught us
how to count, without
which no worthwhile
scientific discovery
could have been
made.”
………Albert Einstein
7th largest country by area • Only 2.4% of world land area, supporting 15% of world population
USD$1.85 trillion economy – growing at 6% GDP • 10th largest by nominal GDP
• 3rd largest by purchasing power parity
1.2 billion people – growing at 1.58% YOY • Second largest country by population
• Middle class is poised to grow by 40% over next 20 years, making it
5th largest consumer market in the world
1948 – V K Krishna Menon in Jeep scandal (Rs. 80 lacs)
1956 – BHU misappropriation (Rs. 50 lacs)
1958 – Mundhra scandal (Rs. 1.2 crore)
1960 – Teja Loan scandal (Rs. 22 crores)
1987 – Bofors (Rs. 64 crores)
1992 – Harshad Mehta (Rs. 5500 crores)
2001 – Telgi Stamp Paper scam (Rs. 20,000 crores)
2010 – 2G (Rs. 176,000 crores)
2012 – Coal Mining scam (Rs. 1,070,000 crores)
…………………… And it goes on
EXISTING LAWS:
INDIAN PENAL CODE, 1860
PREVENTION OF CORRUPTION ACT, 1988
THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988
INCOME TAX ACT, 1961
PREVENTION OF MONEY LAUNDERING ACT, 2002
FORTHCOMING LEGISLATION:
RATIFIED UN CONVENTION AGAINST CORRUPTION ON MAY 1, 2011 (SIGNED DEC 9, 2005).
UNDER UN CONVENTION, PREVENTION OF BRIBERY OF FOREIGN PUBLIC OFFICIALS AND OFFICIALS OF
PUBLIC INTERNATIONAL ORGANISATIONS BILL, 2011 WAS INTRODUCED IN LOK SABHA
PUBLIC INTEREST DISCLOSURE AND PROTECTION TO PERSONS MAKING THE DISCLOSURE BILL, 2010
(WHISTLEBLOWER PROTECTION LAW) PASSED BY LOK SABHA IN DEC 2011 PENDING IN RAJYA SABHA
LOKPAL & LOKAYUKTAS BILL, 2011 PASSED BY LOK SABHA IN DECEMBER 2011 AND PENDING IN RAJYA
SABHA (REFERRED TO SELECT COMMITTEE IN JUNE 2012)
POSSIBLY ON THE CARDS .. PRIVATE SECTOR ANTI-CORRUPTION LAW
Broad definition of “fraud” as a criminal offence
Serious Fraud Investigation Office (SFIO) empowered to investigate and make arrests (can involve other prosecuting agencies such as Income Tax)
Auditors to report fraud directly to SFIO
Imprisonment – 6 months to 10 years
Disgorgement and fines upto 3 times
Independent directors also made liable
Whistleblower/Vigil mechanism mandatory
Political donation limits increased !
Right to Information Act 2005
Escalation • Police/Central Bureau of Investigation
• Vigilance department of SOEs
• Central Vigilance Commission
• Private party criminal complaint
Increasing enforcement actions overseas in respect of India
businesses:
• Electronic Data Systems Corp (2007)
• Dow Chemical (2007)
• Westinghouse Air Brake Technologies (2008)
• Pride International Inc. (2010)
• Diageo plc (2011)
• Oracle Corporation (2012)
• Tyco (2012)
• Walmart’s Internal Investigation (2012 – present)
• Anheuser-Busch InBev NV Internal Investigation (2013-present)
• Finmeccanica (Augusta Westland) Investigation (2013-present)
Frank – Dodd Act Whistleblower tips received from India – 33 out of 324 (most from UK followed by Canada, China and India)