New Indian Research Unit Fights Fraud

India's government has set up a Market Research and Analysis Unit (MRAU) within its Serious Fraud Investigation Office (SFIO), as part of a package of measures designed to protect investors and eliminate events like the recent Satyam scandal.

The new unit will collect information from sources including media reports, corporate press releases and ads, as well as data from investigating agencies, investors, deposit holders, banks and financial institutions. The data will be analysed with an eye to spotting possible problems, and retrospectively to see whether correct procedure was followed, thus establishing best practice and promoting continuous improvement. It will also co-operate with other investigating agencies in India and internationally.

A year ago, Indian and global business was rocked by the 'Indian Enron' as B. Ramalinga Raju, head of IT outsourcing giant Satyam admitted to inflating the firm's cash and bank balances by 70bn rupees ($1bn) in an effort to forestall a takeover.

Other measures announced this week to strengthen the corporate regulatory system and protect investors' interests include steps to allow investors to seek compensation from companies in an event of negligence or fraud, via class action suits; stricter penalties; and greater participation of shareholders.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.