India has been at the centre of conversations across the globe, and the new Government seems to have brought in a noticeable change in terms of regulatory dynamics. In the quest to truly redefine India’s appeal factor and make it an attractive investment destination, the Government has been treading a path of reform. The objective is to induce transformation within the corporate sphere, with a special focus on tackling unethical business practices. This reckoning of sorts, has led them to undertake a three pronged agenda – ensure ethical business decorum, encourage the influx of foreign investments and ease of doing business in India.
The regulatory changes echo positivity, driven by proposed amendments and revisions in laws. These include the amendments to the Prevention of Corruption Act, new Companies Act 2013, Land Acquisition Bill and several amendments to dated law mandates. These highlight how the Government is avidly using the avenue of amending archaic laws to drive this transformation in the country.
A key impediment to the country’s growth has been the prevalence of unethical and corrupt practices. A recently released EY survey (EMEIA Fraud Survey 2015) corroborated this fact, wherein 80% of respondents from India agreed that bribery and corrupt practices happen widely in business.
A change in this notion is being vigorously sought after, with authorities in India resorting to increased enforcement to change public perception. This serves as a warning signal for companies who may have been cutting corners in the past. Recently, the Prevention of Corruption Amendment Act, 2013 has been brought to the forefront which will instil a heightened sense of responsibility within India Inc.
A snapshot of the proposed changes,
The juxtaposition of laws to combat the menace of fraud, bribery and corruption is to induce corporates in India to take adequate measures and ensure that compliance is not ignored.Today, compliance is gradually striking a chord within Indian enterprises and companies are slowly gearing up to ensure they enhance their ethical quotient.
Authorities in India are reinforcing public perception through enforcement of laws; their intent is visible through the numerous high-brow arrests taking place these days. This has served as a warning signal for corporates who may have been cutting corners in the past and perceived it to be acceptable business practices.
Proactive measures are progressively being embraced to identify and seal any gaps within their compliance framework. These include, but are not limited to, introducing or re-evaluating the company’s code of conduct and anti-bribery and corruption compliance framework, setting up of whistle-blowing frameworks to enhance transparency, conducting awareness trainings and implementing thorough fraud, bribery and corruption monitoring systems. Furthermore the backing of foreign investors who need to adhere to global laws such as Foreign Corrupt Practices Act and UK Bribery Act are also propelling compliance within organizations.
The article has been authored by Amit Rahane, Executive Director, Fraud Investigation & Dispute Services at forensicdiariesblog.ey.com
(Vinay Garodiya, Director, Fraud Investigation & Dispute Services contributed to the above post.)