<div>Indian corporates love to lament that they are victims of a corrupt system. They say the licence raj ensures that a bribe is the only way for getting business done in the country and if they are caught, they are prosecuted while the officials who connived with them get protected by the power of the State.<br /><br />A new survey by Ernst & Young’s Fraud Investigation & Dispute Services team finds shows that nearly half of the 250-odd respondents said that they had lost business because of their competitors’ unethical conduct. The top three reasons cited were weak law enforcement, numerous government ‘touch points’, and a complicated tax and licensing system, and while 75 per cent of the respondents say that they favour self-reporting of corruption, many hesitate because of a fear of backlash or victimisation. In short, their hands are tied.<br /><br />But a look through some of the finer points in the report reveals a need for India Inc to introspect. When the surveyors asked respondents for instances where their organisations engaged in unethical conduct purely to boost its reported profits (through advancing the reporting of revenues, under-reporting of costs, or even forcing clients to buy stock earlier than they normally would to meet short term sales targets), 60 per cent of them say they had seen at least one of the above. Contrast that with a global survey by EY that pegged similar practices at 26 per cent in rapid growth economies to get an idea of the depth of the infection. With 77 per cent of the respondents arguing that the Managing Director had to take responsibility to ensure compliance, such practices simply portray the tone at the top.<br /><br />Corruption at times could become a differentiating advantage to grab business, says Arpinder Singh, partner at EY who authored the report. “If the demand is from the government, the supply side is met by the private sector,” he explains<br /><br />Arpinder says there are several cases where investors have bargained hard for a lower price due to irregular practices in certain parts of the business they are looking to acquire <br /><br />The message rings loud. Come clean, or the consequences could be severe.<br /><br /><br />abraham(dot)mathews(at)abp(dot)in<br />matabrahamc(at)gmail(dot)com <br />(at)ebbruz <br /> </div>
