Corporate Fraud and the New Company Law

Abstract

There is no doubt that the new law contains stringent provisions against corporate frauds. It goes beyond the contours of the old company law of 1956. Across the World, Corporate Frauds are on the increase. We have all known the scandal that erupted leading to the collapse of Enron and World Com in the early part of this century. All frauds involve abusing people's trust and diverting corporate resources for personal gains. It is difficult to eliminate fraud by wayward employees. The London Economist points out that the risk of fraud is acute at present because companies are straining the bonds of loyalty.