New Dimensions of Corporate Fraud by Key Managerial Personnel: Insights from Real Instances in India

Abstract

Company is the form of business organization, where the owners are not the one who manages the business. Instead, here the fund providers - investors and lenders provide the finances, but the fiduciary duty to handle the funds in productive and risk-free manner lies in the hands of senior executives. Thus, there is a trust-based relationship between fund-providers and the management. But when the management misuses the funds for personal gain in illicit manner, such incidents shake the faith of the public from the modern economic ecosystem. India witnessed a series of scams from Mundhra Scam to Mehta Scam. The paper attempts to analyse the common techniques employed in the contemporary frauds committed by key managerial personnel in India. For completion of the aim, qualitative study is undertaken by employing secondary data-based case study method. Five cases of frauds committed by key managerial personnel from January to June,2025 has been considered. To make the study more inclusive, cases from different ownership structures and industries have been considered. The study undertakes cross-case analysis by adopting structured analysis with elements of ‘Fraud Triangle’ theory. The analysis identified some common patterns like forgery, manipulating accounting records, circular transactions, preferential allotment and collusion to commit the fraud. Along with safeguards, the study proposes strengthening of corporate governance mechanisms of whistle blowing, auditing and representation of independent directors to mitigate the possibility of fraud. For data of cases considered, the study utilizes journalistic sources. Further studies can be undertaken by enlarging scope and adding other sources of data.