Rebooting Economy XI: Why are private companies so prone to financial frauds?
Apart from rise in financial frauds in private companies in India, recent years have also witnessed a rise in the role of shell companies and tax havens in their operations, raising further concerns about illicit operations

- Jul 29, 2020,
- Updated Jul 29, 2020 8:31 PM IST
On July 22 while India was recording new highs - in COVID-19 case and death counts and in the height of the Ayodhya's latest Ram temple from 161 ft in its 1988 design to 181 ft - a new watchdog of corporate governance made its debut.
On that day, the National Financial Reporting Authority (NFRA), regulator of auditing, announced debarring former Deloitte India CEO Udayan Sen for seven years and imposed a penalty of Rs 25 lakh for "professional misconduct" as Engagement Partner (EP) in auditing and certifying financial statements of the scam-hit IL&FS Financial Services (IFIN) for 2017-18.
The NFRA order said Sen went by the company's attempt at "fraudulent presentation of financial statements" relating to net-owned funds (NOF) and capital adequacy ratio (capital-to-risk assets ratio or CRAR), adding "the fact that the company had ceased to comply with the stipulated NOF/CRAR norms was deliberately misstated". It found the IFIN had incurred losses in 2017-18 which was "turned into a reported profit".
On July 22 while India was recording new highs - in COVID-19 case and death counts and in the height of the Ayodhya's latest Ram temple from 161 ft in its 1988 design to 181 ft - a new watchdog of corporate governance made its debut.
On that day, the National Financial Reporting Authority (NFRA), regulator of auditing, announced debarring former Deloitte India CEO Udayan Sen for seven years and imposed a penalty of Rs 25 lakh for "professional misconduct" as Engagement Partner (EP) in auditing and certifying financial statements of the scam-hit IL&FS Financial Services (IFIN) for 2017-18.
The NFRA order said Sen went by the company's attempt at "fraudulent presentation of financial statements" relating to net-owned funds (NOF) and capital adequacy ratio (capital-to-risk assets ratio or CRAR), adding "the fact that the company had ceased to comply with the stipulated NOF/CRAR norms was deliberately misstated". It found the IFIN had incurred losses in 2017-18 which was "turned into a reported profit".