DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

Project Title: FRAUD IN SECURITIES MARKET

Subject: - CORPORATE LAW II

Name of the Faculty: - DAYANAND MURTHY

Submitted by: -

B. Uday Reddy

2017128

Section-B

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 TABLE OF CONTENTS

CHAPTER I

1. Abstract
2. Introduction

CHAPTER II

1. Types of securities market fraud

2. Corporate misrepresentation
3. Insider trading
4. Securities fraud

CHAPTER III

1. Case study I
2. Case study II
3. Case study III

CHAPTER IV

1. Reforms in Law on account of Fraud

2. Conclusion

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 ACKNOWLEDGEMENT

Any activity big or small is a result of collective efforts of several individuals and this
research paper report is also a sequel of several individuals who have given their valuable
contribution in fulfillment of this project At first I would like to express my profound
gratitude towards my faculty of COMPANY LAW, who has provided me an opportunity to
resent this project and was available with the valuable information whenever it was needed.

I would also like to acknowledge a deep sense of gratitude to my friends and my roommate
for their immense support and guidance.

Last but not the last, my overriding debt continues to all the people who were directly or
indirectly associated with this project.

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 ABSTRACT

Security market is a segment of the more extensive monetary market where securities can be
purchased and sold between subjects of the economy, based on interest and supply. Security
markets envelops financial exchanges, security markets and subsidiaries markets where costs
can be resolved and members both expert and non-expert can meet. Securities markets can be
part into two levels: essential markets, where new securities are given, and optional markets
where existing securities can be purchased and sold. Optional markets can additionally be
part into coordinated trades, like stock trades and over-the-counter, where individual
gatherings meet up and purchase or sell securities straightforwardly. For securities holders
realizing that an optional market exists in which their securities might be sold and changed
over into money expands the eagerness of individuals to hold stocks and securities and hence
builds the capacity of firms to give securities.

There are various expert members of a securities market and these incorporate; financiers,
representative vendors, market producers, venture administrators, theorists just as those
giving the foundation, like clearing houses and securities vaults. A securities market is
utilized in an economy to draw in new capital, move genuine resources in monetary
resources, decide costs which will adjust request and supply and give a way to put away cash
both short and long haul.

The Securities market is a piece of the monetary market where purchasing and selling of
securities are finished. Much the same as some other monetary market, securities market is
additionally inclined to tricks, fakes and unlawful exercises. Securities market in India
includes a large number of dynamic financial backers consistently putting away and bringing
in cash through the exchange done. So it is exceptionally vital for check and forestall any of
the tricks or fakes in the market to shield the interests of the multitude of financial backers in
the securities market.

Attributable to the development of securities market in the Indian economy in 1992, the
Public authority of India set up an administrative body to care for this market. It was known
as the Securities and Trade Leading group of India (SEBI). This Securities and Trade leading
group of India (SEBI) was depended with the accompanying duties:

1. Ensuring the interests of financial backers in securities market.

2. Manage the tasks of the securities market.

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 3. Advance and create securities market.
4. Manage the insider exchanging an organization.

AIM:

The major aim of this paper is to analyse the current scenario of India Stock market. It also

Intends to study the features of primary and secondary market, the malpractices that are most

commonly observed, the general process of stock trading and the most famous and commonly

known stock market issues.

Research Methodology:

For this study, only secondary sources- Doctrinal research have been referred to. Secondary
sources include articles, and journal publications. Various other websites, blogs and web
derived materials have also been used for the study.

TYPES OF FRAUDS IN SECURITIES MARKET

Securities extortion, otherwise called stock misrepresentation and venture extortion, is a

tricky practice in the stock or items markets that actuates financial backers to settle on buy or
deal choices based on bogus data, often bringing about misfortunes, infringing upon
securities laws1.

Securities misrepresentation can likewise incorporate through and through burglary from
financial backers (misappropriation by stockbrokers), stock control, errors on a public
companies monetary reports, and misleading corporate examiners. The term envelops a wide
scope of different activities, including insider exchanging, front running and other unlawful
follows up on the exchanging floor of a stock or item trade2.

CORPORATE MISREPRESENTATION

Misrepresentation by significant level corporate authorities turned into a subject of wide

public consideration during the mid-2000s, as exemplified by corporate official unfortunate
behaviour at Enron. It turned into an issue of such degree that the Hedge Organization
declared what it portrayed as a "aggressive agenda" against corporate extortion. Less

1
https://www.fbi.gov/stats-services/publications/securities-fraud.
2
https://www.sec.gov/news/testimony/2006/ts092606lct.htm.

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generally advertised signs proceed, for example, the securities misrepresentation conviction
of Charles E. Johnson Jr., originator of Purchase Pro in May 2008. At that point FBI Chief
Robert Mueller anticipated in April 2008 that corporate misrepresentation cases will build
due to the subprime contract emergency.

INSIDER TRADING:
Denying insiders from trading when they have prevalent information, and driving them to
reveal every one of their exchanges are measures pointed toward lessening the awry data and
reestablishing market certainty among market members and the overall population. Here, it
isn't evident that any market arrangement, like flagging or notoriety, would tackle the issue.
Hence, possibly rules and guidelines to decrease the unbalanced data might be government
assistance expanding, given that a well-working business sector can be viewed as a public
decent. There are four methods through which insider trading might actually hurt the
organization. To begin with, insider trading may diminish the effectiveness of corporate
choices by deferring the transmission of data inside the organization. Nonetheless, if a
supervisor needs to exchange on value touchy data prior to communicating it to her boss – a
telephone call to her representative would do the trick and this would not take in excess of a
couple minutes. In this way, the postpone story isn't persuading. Second, insider trading may
expand the individual chief's motivations to pick high-chance project, where the advantages
from insider trading are bigger. Nonetheless, this may lessen the contention that directors are
more danger opposed than investors. Third, directors may control share costs, by exposure
arrangements and so forth, to expand their insider trading benefits and at impressive social
expenses. Nonetheless, forbidding insider trading is additionally exorbitant. Fourth, insider
trading may hurt the organization's standing. The principle issue is that the insider data is the
property of the company. In this manner the insider trading is essentially an authoritative
situation and could be settled through agreements between the organization and the client of
any insider data. By and by, insider trading rules and guidelines could involve setting up and
checking principles of data, administering exposure prerequisites and authorizing
commitments to incorporate review reports in the yearly assertions of organizations3.
Securities frauds

A security trick has the accompanying highlights:

a) manipulation in share costs.

3
https://www.fbi.gov/stats-services/publications/securities-fraud.

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b) monopoly in managing an immense number of portions of an organization.

c) money laundering-acquiring cash to exchange protections yet utilizing the assets for
detached purposes.

As indicated by the Securities Exchange Act(1934)SEA-"It will be unlawful for any

individual to participate in any demonstration, practice or game-plan which works or would
work as an extortion or duplicity upon nay individual regarding the buy or offer of a
security." While understanding the causes or potential systems by which a security trick takes
places we can on an equal plane comprehend the thought processes in monetary market
guideline in any case called the financial aspects of monetary market guideline. There is a
sure fundamental danger included if dealers or banks get into settlement issues during the
cycle of executing in protections. Provided that this is true, it brings about a domino impact,
which could make issues for different banks and specialists in the framework. A foundational
hazard additionally can happen when there isn't sufficient liquidity in the framework because
of very scarcely any merchants, hoarding in the exchange of a security. Additionally insider
trading is another issue when dealers who are insiders to an association exchange when they
have prevalent information which is viewed as unjustifiable and an augmentation of deviated
data. Additionally focus inclinations of brokers towards managing in one security just ought
to be maintained a strategic distance from. There is too a customer insurance to guarantee that
the value arrangement measure is productive as could really be expected and furthermore to
guarantee adequate rivalry among merchants, intermediaries furthermore, other market
members4.

COMMON REASON FOR FRAUDS AND WHY THEY ARE NOT DETECTED AT
EARLY STAGE

1. Diminishing Ethical Values

2. Poor Governance
3. Ineffective Internal Control Systems
4. Compliances in letter; not in spirit
5. Highly Volatile Securities Market
6. Lack of Investor Awareness and Activism
7. Lack of Protection for Whistle blowers

4
"Securities and Exchange Commission: Securities fraud and insider trading", Palgraves’ Dictionary Of Money
And Finance.

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 The Harshad Mehta Scam (1992)

Harshad Mehta was the child of a peon. He was brought into the world in servile destitution
and when he moved to Mumbai, he had a simple Rs 40 for example under $1 in his pocket.
Nonetheless, throughout the long term Harshad Mehta rose transiently to get quite possibly
the most persuasive and amazing agents on the Bombay Stock Exchange. At the pinnacle of
his ability, his armada of vehicles would match that of the country's greatest industrialists and
he was the subject of pretty much every news show in the country.

Afterward, it was uncovered that Harshad Mehta had utilized some corrupt way to get his
abundance. The one who had gone to the city with $1 had near $8 billion as his total assets!
Be that as it may, he was subsequently indicted for cheating the general population and
passed on in jail. In this article, we will discover more about the protections trick of 1992 for
which Harshad Mehta was indicted and shipped off jail:

The Two Markets

India had two altogether different yet equal business sectors in activity. One market was for
corporate protections for example the stock trade. Here the necessary profit from reserves
was a lot higher. Likewise, there were a moderately enormous number of merchants that were
available on the lookout. Indeed, even in 1992, at any rate 50 intermediaries worked in the
Bombay Stock Exchange.

Contrasted with that, the market for government protections had not exactly twelve
merchants that worked. These merchants must be authorized by the Reserve Bank of India.
This is on the grounds that the market for government protections was an interbank market
for example the purchasers and merchants in this market were generally banks. Likewise, the
turnover in this market was near $1 billion every day which was 3 to multiple times bigger
than the stock trade and simultaneously the expense of assets here was half of that on the
stock trade!

The presence of these two equal business sectors set out overflowing open doors for
exchange. It wouldn't have been long until somebody dared to break the glass segment
between the two business sectors and that somebody was Harshad Mehta.

Edginess by the Banks

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Banks in India were battling to make generous benefits in the 1990's. This is on the grounds
that there were other contending items like the currency market assets and portfolio the
executives administrations which were offering better re-visitations of the financial backers,
hence pushing business away from the banks. There was subsequently a gigantic rivalry
among banks for the extra money that was held by the Indian corporate area especially the oil
and gas public area units. This opposition and the longing to acquire a benefit over
contenders drove the banks into the plans of sly specialists like Harshad Mehta.

The Massive Diversion

Harshad Mehta's plan was exceptionally basic basically. He would furtively steal tremendous
amounts of cash from the public authority protections market for a brief term. He would then
put this cash in a couple of chosen protections and drive their costs madly high. At the point
when individuals would get amped up for a specific security, Harshad Mehta would gradually
sell his property, take care of the stole cash and pocket the gigantic contrast brought about by
rising costs. The scale at which Harshad Mehta was doing this was unfathomable. In one
year, he had driven the Sensex for example the list of the Bombay Stock Exchange from 1000
to 4500! It was an extraordinary bull run, never found throughout the entire existence of a
traditionalist Indian market.

The Modus Operendi

Harshad Mehta's strategy for misappropriation was somewhat confounded. Mr Mehta had
conspired with the banks to change the actual idea of the public authority protections market.
Prior, the job of a merchant was uniquely to unite the gatherings while the banks would
embrace the exchange of protections and loaning of cash themselves. In the new market set
up by Mr Mehta, the specialist was to a greater degree a market creator. This implied that
both the banks were managing the intermediary and neither knew who the counterparty was.
Hence, Mr Mehta could get the banks to store a check in his record and have the assets for
himself for a brief timeframe!

Likewise, there was a delay in the payment of cash and saving of security. Thus, for this brief
timeframe term, the cash was basically an unstable credit to the representative and could be
utilized to fix the business sectors.

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The Harshad Mehta trick was found when consideration was paid to the cash missing from
the public authority protections market. As the trick loosened up, the valuations in the
Bombay Stock Exchange fell. The super development that had been seen by the trade in one
year came slamming down surprisingly fast. Individuals lost their life investment funds in the
trick. A few financial backers were intensely utilized and thus ended it all because of the
aftermath.

The issue rose to public conspicuousness. Foundations like Reserve Bank of India, Central
Bureau of Investigation and Parliamentary Committees must be included. The matter turned
out to be significantly more tangled as Harshad Mehta hacked up the name of Prime Minister
of India , Shri P.V. Narsimha Rao just like a recipient from the defilement and took steps to
uncover a lot more names.

CONSEQUENCES

At long last, the council discovered Harshad Mehta straightforwardly liable for stealing worth
Rs 1439 crores ($3 billion) and causing a trick that prompted the deficiency of abundance as
much as ($7 billion). Right up 'til today, the Harshad Mehta trick raises recollections of
exceptional win and fail which was never seen before by the Bombay Stock Exchange.

The Ketan Parekh Scam: 2001

The Ketan Parekh trick was the second most significant trick that shook the Bombay Stock
Exchange after the Harshad Mehta trick. To exacerbate the situation, Ketan Parekh was
himself a prong of Harshad Mehta and had taken in stock trading from the pied flute player
of Bombay Stock Exchange himself. Therefore, he had the option to accomplish a
comparative accomplishment when contrasted with what Mehta himself had achieved.

At the point when he was accepted to be without any help driving the financial exchange,
Ketan Parekh had made a 200% yearly profit from certain stocks. The position of safety
Indian financial exchange was abruptly by and by standing out as truly newsworthy
everywhere on the world. Later it worked out that it was dealer turned administrator Ketan
Parekh that was driving the market and not changes in the essentials.

About Ketan Parekh

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As of now referenced above, Ketan Parekh was a protg of Harshad Mehta. In any case, in his
attitude he didn't be in any way similar to Mr Mehta. He was a calm, unassuming person that
you would confuse with being a normal individual in the city. Nonetheless, in all actuality his
partners and rivals portray him as being especially quick and savage. In contrast to, different
dealers, there would be no development or cautioning of Ketan Parekh's moves. He would
surprise the market and raise or drop the costs of stocks in a moment by unexpectedly
releasing loads of cash on the lookout.

He was a sanctioned bookkeeper by proficient preparing and had begun dealing with his
family's financier business. At the tallness of his prosperity Ketan Parekh was companions
with global superstars like Kerry Packer and the two of them had together begun an
investment with the purpose of subsidizing new businesses in India.

Ketan Parekh's Modus Operandi

Ketan Parekh had a main story to back his corrupt dealings and lose cynics track. He was
supposed to be a devotee of the Information, Communication and Entertainment area for
example the ICE area. This was nothing uncommon given the way that late 90's and mid
2000's were the point at which the IT blast occurred and these were the stocks which were
really developing significantly around the world.

Consequently, appear couldn't help suspecting that the stocks Ketan Parekh was picking were
developing a direct result of their basics. The gigantic 200% development in his offers was
along these lines not as amazing and didn't pull in as much consideration as Harshad Mehta's
ventures did.

Be that as it may, truly, Ketan Parekh was paying special mind to stocks which had a low
market capitalization and low liquidity. He would then siphon cash into these offers and start
invented trading inside his own organization of organizations. The normal individual on the
bourses may start to accept that his stocks were rising and they also would begin contributing
driving the costs much higher. At that point, as the market took over Ketan Parekh would
exchange his possessions gradually, by and by making less clamor than his coach Harshad
Mehta would have done.

Ketan Parekh utilized this usual methodology consistently for 10 stocks which he had picked.
These stocks came to be known as the K-10 stocks and the market consistently appeared to be
bullish about the eventual fate of these stocks.

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The Illegalities

The issue with Ketan Parekh's dealings was two-crease:

First and foremost, he had been tolerating cash from the advertisers of numerous
organizations to take their offer costs up. This can be viewed as insider trading and without
anyone else was sufficient to get Ketan Parekh into extreme difficulty.

Nonetheless, to top it up, Ketan Parekh had additionally stolen a lot of money from the
Madhavapura Mercantile Commercial Bank (MMCB). He was accepted to have paid off the
authorities of the said bank to convince them to loan against offers to a more noteworthy
degree than was allowed by law. From the start, the bank crossed its endorsed cutoff points to
loan against market protections as it stretched out credit to Ketan Parekh. At that point, the
bank essentially began making unstable advances to him. The credits would be endorsed first
and the security would be gathered a couple of days after the fact making the advances
unstable for the interval span.

The Fallout

Ketan Parekh likewise directed greater part of his tradings in the Calcutta stock trade (CSE).
The absence of guideline in this trade gave greater adaptability to Mr Parekh. He didn't
exchange for him however rather educated different representatives to hold protections and
paid them a commission to do as such while making great any misfortunes that they may
have accumulated on the position.

Notwithstanding, as a bear cartel began pounding the K-10 stocks, Ketan Parekh wound up
bolted out of money. The MMCB bank was likewise not ready to loan out credit and rescue
Mr Parekh. Accordingly, the dealers that were standing firm on footholds for his sake in the
Calcutta Stock Exchange had to exchange also causing a monstrous auction on the lookout.
Financial backers lost cash as much as ($4 billion).

Ketan Parekh was quickly captured and investigated in court. He has been disallowed from
trading in the Bombay Stock Exchange for a very long time for example till 2017.
Additionally, he had been condemned to one year thorough detainment for his financial
violations.

There have been bits of gossip in the Bombay Stock Exchange that Ketan Parekh actually
keeps trading from an organization of anonymous partnerships. In 2008, the controllers

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started a test into this and numerous organizations were banished from trading in the trade. In
any case, the degree to which such activities can stop the exercises of Ketan Parekh is yet to
be found out.

SATYAM COMPUTERS SCAM: 2009

B. Ramalinga Raju, set up Satyam Computers in Hyderabad, India in 1987, with under 20
laborers. By chance, Satyam implies "truth" in the old Indian language Sanskrit. The
association has some aptitude in information advancement, business organizations, PC
programming, and is a driving re-appropriating association in India. Satyam immediately
experienced achievement after it gave the main offer of stock on the Bombay Stock Exchange
in 1991. Set up on 24th June 1987 by B. Ramalinga Raju and his sibling by marriage, D. V.
S. Raju, Satyam Computers Services Limited was merged in 1991 as an open compelled
association and besides got its first Fortune 500 client, Deere and Co. In a restricted capacity
to center time, it transformed into a primary overall advising and IT organizations association
navigating 55 countries before foe got the ball really rolling with it.

It was one of just a small two or three Indian IT organizations associations recorded on the
New York Stock Exchange. It was situated as India's fourth greatest programming exporter,
after TCS, Infosys and Wipro. The 1990s were a time of critical improvement for the
association. It similarly caused the improvement of different reinforcement associations like
Satyam Renaissance, Satyam Info way, Satyam Spark Solutions and Satyam Enterprise
Arrangements; Satyam Info way (Sify) by chance transformed into the essential Indian web
association to be recorded on the NASDAQ. Satyam acquired a lot of associations and
stretched out its errands to various countries and stamped MoUs with various overall
associations in the forthcoming years.

Satyam added a considerable number crest to its top by transforming into the essential
association on the planet to start a program known as the Customer-Oriented Global
Organization getting ready in May 2000, stamping contracts with different worldwide
players, for instance, Microsoft, Emirates, Advancements and Ford, attesting the advantage of
being the primary association on the planet asserted by BVQI, and securing the name as an
overall association by opening work environments in Singapore, Dubai and Sydney. In 2005,
it secured a 100% stake in Singapore-based Learning Dynamix and 75 percent stake in
London based Citisoft Plc. Satyam was an association making a course for progress to

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advance and has truly acquired for itself a name for a guiding in the area of approach
straightforwardly through to executing IT answers for customers.

At the zenith of its business, Satyam used just about 50,000 delegates and worked in 67
countries. Satyam was for example of India's creating accomplishment. Satyam won different
distinctions for advancement, organization, and corporate obligation. In 2007, Ernst and
Young conceded Mr. Raju with the Entrepreneur of the Year award. On April 14, 2008,
Satyam won distinctions from MZ Counsel's for being a trailblazer in India in corporate
organization and obligation. In September 2008, the World Council for Corporate
Governance allowed Satyam with the "Overall Peacock Grant" for overall significance in
corporate obligation. Appallingly, under five months ensuing to winning the Global Peacock
Award, Satyam transformed into the feature of an immense accounting blackmail.

Issue

Issues in Satyam start when on December sixteenth, 2008; its overseer Mr. Ramalinga Raju,
in a stun move proclaimed a $1.6 billion proposal for two Maytas associations for instance
Maytas Infrastructure Ltd and Maytas Properties Ltd saying he expected to send the cash
open to help monetary trained professionals. The two associations have been progressed and
obliged by Raju's family. The thumb down given by monetary subject matter experts and the
market compelled him to pull out inside 12 hours.

Offer costs plunges by 55% on stresses over Sat sweet potato's corporate organization. In a
startling move, the World Bank pronounced on December 23, 2008 that Satyam has been
ousted from business with World Bank for quite a while for outfitting Bank staff with
―improper benefits‖ and blamed for data robbery and impacting the staff. Offer costs fell
another 14% to the most insignificant in over 4 years.

The one self-sufficient leader since 1991, US academician Mangalam Srinivasan, pronounced
renunciation sought after by the renouncement of three logically free bosses on December 28
for instance Vinod K Dham (comprehensively known as father of the Pentium and an ex Intel
specialist), M Rammohan Rao (Dean of the prominent Indian School of Business) and
Krishna Palepu (teacher at Harvard Business School).

At long last, on January 7, 2009, B. Ramalinga Raju detailed affirmation of over Rs. 7800
crores budgetary coercion and he gave up as a manager of Satyam. He revealed in his letter
that his undertaking to buy Maytas associations was his last undertaking to ―fill designed

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assets with authentic ones‖. He yielded in his letter, it looked like riding a tiger without
acknowledging how to get off without being eaten. Satyam's publicists, two kin B Ramalinga
Raju and B Rama Raju were caught by the State of Andhra Pradesh police and the Focal
government accepted accountability for the contaminated association. The Raju kin were held
for criminal break of trust, conning, criminal conspiracy and impersonation under the Indian
Penal Code.

The Central Government reconstituted Satyam's board that included three-people, HDFC
Executive, Deepak Parekh, Ex Nasscom chief and IT ace, Kiran Karnik and past SEBI part C
Achuthan. The Central Government added three extra heads to the reconstituted Board i.e.,
CII manager mentor Tarun Das, past head of the Institute for Chartered

Accountants (ICAI) TN Manoharan and LIC's S Balakrishnan. Seven days after Satyam
coordinator B Ramalinga Raju's dishonorable affirmation, Satyam's evaluators

Worth Waterhouse finally yielded that its audit report wasn't directly as it relied upon wrong
spending reports given by the Satyam's organization. On January 22, 2009, Satyam's CFO
Srinivas Vadlamani confessed to having extended the quantity of agents by 10,000. He
uncovered to CID specialists exploring him this supported in drawing around Rs 20 crore for
every month from the related at this point fanciful compensation accounts.

Andhra Pradesh State CB-CID attacked the spot of Suryanarayana Raju, the most young
kinfolk of Ramalinga Raju who had 4.3 percent in Maytas Infra, and recovered 112
arrangement deeds of particular land purchases and improvement understandings. Senior
assistants S Gopalakrishnan and Srinivas Talluri of the looking at firm
PricewaterhouseCoopers (PwC) were caught for their asserted occupation in the Satyam
shame. The State's CID police booked them, on charges of coercion (Area 420 of the IPC)
and criminal conspiracy (120B).

Casualties OF FRAUD

Laborers of Satyam spent eager minutes and anxious nights as they went up against non‐
payment of pay rates, adventure scratch-offs, reductions and correspondingly sad possibilities
of outside work. They were abandoned according to various perspectives – morally,
financially, honestly, and socially.

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Clients of Satyam imparted loss of trust and examined their arrangements jumping at the
chance to go with different competitors. Cisco, Telstra and World Bank dropped contracts
with Satyam. ―Customers were staggered and worried about the endeavor congruity,
mystery, and cost attack.

Financial backers lost their significant endeavors and there was question about reclamation of
India as a supported theory objective. The VC and MD of Mahindra, in a declaration, said
that the improvement had "achieved limitless and baseless damage to Brand India and Brand
IT explicitly."

Merchants were stressed over recovery of budgetary and nonfinancial presentation and
investigated workplaces.

Indian Government was worried about its image of the Nation and IT Sector affecting
certainty to assemble or to work in the country.

Investigation

BB Raju concealed his actual monetary situation to guarantee his business runs easily and the
takeovers are under control. He needed to secure more assets and fabricate a home for which
he siphoned those assets in different zones like land property assessed around 7 crores and
held in Matyas firm. He did likewise with numerous organizations in Benami or in his own
name.

He attempted to overcome any issues between imaginary resources of Satyam with the
genuine resources of Matyas.

A portion of the senior administration permitted certain workers to counterfeit bills of the
organization which depicted some unacceptable situation. These solicitations were then gone
into the organization's framework and it was found around 5 crores worth of them were
phony. The bogus solicitations were fashioned as money receipts and subsequently there
were bogus bank articulations.

Dominate Portal was utilized for concealing the phony solicitations, Satyam Project
Repository was utilized to make project ids, Project Bill Management System for producing
Bills, Operational Real-time Management for making and overseeing counterfeit receipts,
Invoice Management System for making counterfeit solicitations these were applications
utilized for the misrepresentation.

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Conclusion

To the extent the appropriateness of class suits in India, from the start under the watchful eye
of the association law 2013 was executed, it was difficult to get a legitimate reaction in any
such conditions like Satyam, yet with the use of association law 2013, it has ended up being
totally sensible concerning Indian Judicial Systems. People have started choosing these class
suits since they have gotten an additional ground while engaging against any abuse of powers
by the association the chiefs, against basic days where the fundamental reaction available was
a typical suit, which was not at all possible being significantly time and cost eating up.

Regardless of the way that it is a significantly amazing circumstance, the courts should
choose from the outset that the particular class movement suit was procured incredible
certainty, and second, it has a nice believability of accomplishment. It should deal with
accordance with law.

Reforms in Law on account of Fraud

 SEBI got statutory recognition

 Rules of Trading changed
 Ring trading was replaced by system driven electronic trading
 Physical shares were replaced by digital shares
 Settlement Mechanism was made Faster and Faceless
 Corporate Governance became part of the law
 State of art surveillance systems deployed by SEBI
 Regulatory Thrust on Disclosures/Reporting by companies and Monitoring
 Law introduced for hammering down Ponzi/ Fly by Night Schemes
 Code of Conduct for Market Intermediaries strengthened
 Rules for Issuance of Securities Rationalized to prevent frauds
 Tough law to prevent and prohibit Insider Trading
 More Powers to SEBI to investigate, order for disgorgement, bar from securities market
and even arrest.

CONCLUSION

While the corporate governance framework in the country is seen at par with other developed
markets, the same has to be implemented in 'letter as well as spirit.

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The fact that white collar crime continues to occur, and seemingly at an
increasing rate, suggests that the expected costs do not outweigh the
expected benefits from cheating. Stronger penalties are needed.

So this concludes the list of Indian scams of all times. According to the compilation, the total
amount of money involved in various scams over the last 12 years alone, since 1992, is
estimated to be over Rs 80 lakh crore (Rs 80 trillion) or $1.80 trillion!• To many people
abroad, India is seen sentimentally as Mahatma Gandhi’s country of khadi cloth, good ethics,
and care for the poor. To some it is an economic miracle and a future super power, while to
others it is an unkind cruel place of caste, ethnic and rich-poor divisions and violence. Above
all however, and not far below the surface, India is a maze of unethical, unlawful and illegal
swindles that link most politicians, many bureaucrats, and a large number of businessmen and
others.

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