Crime busters have a new ache
Source: The Economic Times
Date: July 24, 2003
Crime busters have something new to worry about. Moving away from the social arena, crime has now expanded its reach into the corporate world, with economic crime emerging as a major issue. According to a survey conducted by PriceWaterhouse Coopers, one fourth of the companies covered in India, reported significant economic crime over the last two years. However, when it comes to impact assessment, these companies appear to be more tolerant about reporting such crimes, and most went on to argue that the impact on their share price was not significant.
Corruption and bribery are not limited to politicians, as the survey which covered India for the first time revealed that Indian companies regarded these vices as the most prevalent economic crime in their organisation. Other types of economic crimes include financial misrepresentation, asset misappropriation, product piracy and counterfeiting.
Surprisingly, only about 9% of the respondents considered product piracy as a major issue for their company, even as it emerged the most prevalent economic crime in the country, and was much higher than what was reported in other parts of the world.
Far from being a victimless crime, fraud can have material and lasting impact on businesses and their reputation, says Ashwani Puri, head of corporate finance and recovery at PWC India. Economic fraud is perceived to undermine staff morale, reputation and business relationship.
The report revealed that the percentage of respondents who regarded economic crime as a major issue, was much lower in India at 24%, against 37% worldwide. Further, 85% of the Indian respondents said they have taken measures to protect themselves from economic crime, which was notably higher than 75% for Asia Pacific and 78% across the globe.
A majority of the respondents said they did not expect the risk of fraud to decrease in the next five years. In fact, they considered that product piracy, cybercrime and industrial espionage would be the major issues that would have to be tackled in future.
Original article: http://www1.economictimes.indiatimes.com/cms.dll/html/uncomp/articleshow?msid=66030
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