Regulations
Fiscal frauds are sore point for foreign investors: Study
 A rise in financial frauds has become one of the sore points for foreign investors and needs to checked by a global standard regulatory framework coupled with the companies' in-house mechanisms, a study has said.
 
"With the increased prevalence of fraud and the negative consequences associated with it, there is a strong argument that companies should invest resources and time to tackle it," a paper authored jointly by Associated Chambers of Commerce and Industry of India (Assocham) and global consultancy firm Grant Thornton said.
 
"Cases of financial fraud have risen in India over the last few years and have become one of the main factors deterring foreign companies from investing in India," it said.
 
As the Indian economy is growing, increasing corporate frauds will prove to be disastrous for India, the paper said. 
 
Noting companies' inability to perform an effective fraud risk assessment, the paper said, "As technology is advancing, fraudsters are able to find ways to use it and perpetrate a fraud. Tech-savvy fraudsters are using technology in a variety of ways to commit fraud."
 
"Devious ingenuity of the human brain is now leveraging technology to indulge in more sophisticated methods of crimes which are very much capable of creating systemic instability," Assocham President Sunil Kanoria was quoted as saying.
 
"Putting restrictions on what your employees have access to will limit the potential of misappropriation of assets but if an employee has access to all aspects of an organisation, the potential for fraud is significantly increased," the paper said.
 
Vidya Rajarao, Partner, Grant Thornton India, said the initiative to stop frauds must come from the senior management. 
 
"The responsibility of preventing, detecting and investigating corporate and financial frauds rests squarely on board of directors. The top management should define their anti-fraud strategy, establish appropriate fraud mitigation steps and train their employees to combat financial and corporate frauds," Rajarao said.
 
It is not to suggest as if there are no financial frauds taking place in rest of the world, said the paper that enumerated several big-time scandals that have hit the international headlines. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  

 

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Who are terrorists and who finances them?
Nearly, every day in one country or the other terrorists strike and innocent people are killed. Terrorism is global menace. It has become a major problem of this century. Attempts made to counter it have not produced any tangible results. This is evident from series of attacks taking place one after the other. The recent ones are in Bangladesh followed by Nice in France, which butchered 84 people and wounded many. This has been done in the name of Islam—if this is Islam, then I hang my head in shame, being the follower of Islam. George Bernard Shaw said, “Islam is the BEST religion, with the WORST followers” and his comment has proved prophetic.
 
Terrorism is a barbaric act. It raises its ugly head with its varied faces and manifestations to bite into the goodness of humanity and spread barbarism, hatred, extremism, radical thoughts, and bigotry. Terrorists are monsters who do not hesitate in using the cruellest methods of violence and do not spare even women and children. These terrorists have no heart. They are blinded by extreme ideology that only misguides them to commit the heinous crime of inflicting fatalities—most of the time it is revenge motivated or like Karma Boomerang (phrase used by Timothy Bancroft-Hinchey -Hinchey Director and Chief Editor of the Portuguese version of Pravda.Ru)
 
It is reported that among the 84 people killed there were 10 children — the youngest six months, the eldest 18 years... In his article in Pravda.Ru dated 16 July 2016, Timothy Bancroft-Hinchey raises a poignant question “How can a child, who has no notion of the issues involved and who has done nothing actively or passively against the murderer, deserve to be maimed, scarred or killed in the name of some cause?”
In 2011, Timothy Bancroft-Hinchey wrote, “Let us hope France, the UK and US do not start complaining when what they are doing in Libya happens on their doorstep”. 
 
He continues, “But let us not forget what France did in Libya, alongside its UK; US bed masters. France perpetrated a massive act of state terrorism, strafing civilian structures with military equipment, strafing civilians with weaponry, destroying the electricity grid, destroying the water supply network, bombing the water pipe factory so that the pipeline could not be repaired, siding with marauding demonic hordes of terrorists, who sliced the breasts off women in the streets, impaled boys on stakes, gang-raped little girls before and after beheading them and after forcing them to watch their parents being tortured to death.”
 
Now a few questions to Dr Zakir Naik, and other hard line Islamic preachers…
  • Does any divine injunction enjoin on Islam followers to slice the breasts of women, indulge in gang rape, destroy the electricity grid and the water supply network and force children watch their parents being tortured?
  • Is it not gruesome, shocking, unacceptable, and a blot on humanity?
  • Are these terrorists not barbaric bloodthirsty organization?
  • Don’t they lack compassion even for those they control or capture, whether Muslim, Christian or Jew?
  • Are they not well-organised mindless entities actively selling a fairly-tale not only to the marginalised Muslim youth but to the educated ones also and those weak-minded enough to believe their seductive message?
I wish I get the answers.
 
Dr Zakir Naik in my assessment could be described as an extremist Islamic Scholar of Wahabi doctrine believing in the medieval interpretation of the Quran. He has demonstrated the ability to embrace modern methods of spreading his message. His oratorical skills are sharp. Intelligent use of social media has been at the forefront of his preaching tactics. His speeches do seem to brainwash, who listen to him, into believing that they will achieve martyrdom if they murder others they perceive as the enemy of Islam. Or take to suicide bombing to achieve that purpose.
 
However, there is nothing in the Quran, which justifies an act of suicide in any way, shape or form. In fact, any act of individual or collective suicide, is strictly condemned. Therefore, these young men, who sacrifice themselves by doing what is prohibited and condemned by the Quran edicts will, suffer eternally in Jahannam (Hell/Narak) that includes suicide bombers as well but as I understand, according to Dr Naik their permanent abode will be Jannat- (Heaven/Swarg).  I wish to know from which Ayat of the Quran this inference has been drawn.
 
Who Funds Terrorist?
 
“Money is the fuel that feeds the fire of international terrorism,” said New York Governor Cuomo in a statement. “Global terrorist networks simply cannot thrive without moving significant amounts of money throughout the world. At a time of heightened global security concerns, it is especially vital that banks and regulators do everything they can to stop that flow of illicit funds.”
 
My article, “How terrorists finance their operations,” published in Moneylife on 2 September 2014 very briefly highlights the various methods used to raise funds to finance terror operations. Loretta Napoleoni, the Italian bestselling author, economist and journalist studied and interviewed a wide range of terrorist groups globally. This includes the Italian “Red Brigades”, a Marxist organisation to members of Al Arqawi in the Middle East, and the Islamic State of Iraq and Syria (ISIS), a rapidly growing Sunni militant group that is consolidating power throughout Iraq and Syria, and is currently thought to be the richest insurgent group in the world. Her findings have shed light on how the business model of terrorist organisations has evolved over a period, and how the legitimate global financial system becomes unwittingly complicit as a channel for terrorist financing. 
 
Organised crime rackets of drug trafficking, people trafficking; extortion and other like offences are typical crimes for funding terrorism. However, much lower grade ---and more difficult to detect-- crime such as simple fraud, burglary and robbery are used by terrorists who are "sleeping” that is already in place in a country waiting for instructions and do not want to come to the attention of the authorities by becoming employed or by claiming benefits. The perpetrator of the deadly attack in Nice (France) falls in this category. He was a lone wolf, I guess.
 
However much of the money intended for terrorism does not arise out of crime - it is paid into the accounts by people who earn it legally in ordinary jobs and who pay money to a cause in which they believe. For this reason, money does not come into the financial system as dirty money, which is a point at which dirty money is often most visible.
 
“Funding remains the life blood of terrorist organizations,”, “It is also one of their most significant vulnerabilities,” says Dennis Lormel, CAMS, a counterterrorism expert.
 
Discovering and intercepting these sources of funding is the most effective way to choke these organisations and deprive them of their most powerful weapon – cash.
 
(SSA Zaidi is a retired banker and consultant for training and development. He is also author of Anti Money Laundering /Anti-Terrorism Financing & Know Your Customer)
 
 

 

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DoPT seeks opinion from chief secretaries on prosecuting corrupt officials
As a sequel to a 2012 Supreme Court judgment wherein Subramanian Swamy was the petitioner, the Department of Personnel & Training (DoPT), is seeking opinion from chief secretaries on how to empower a common man to take on corrupt babus. In a judgement on 30 January 2016 (Civil Appeal No1193 of 2012), the Supreme Court had observed, “Today, corruption in our country not only poses a grave danger to the concept of constitutional governance, it also threatens the very foundation of Indian democracy and the Rule of Law. The magnitude of corruption in our public life is incompatible with the concept of a socialist, secular democratic republic. It cannot be disputed that where corruption begins all rights end. Corruption devalues human rights, chokes development and undermines justice, liberty, equality, fraternity, which are the core values in our preambular vision. Therefore, the duty of the Court is that any anti-corruption law has to be interpreted and worked out in such a fashion as to strengthen the fight against corruption. That is to say in a situation where two constructions are eminently reasonable, the Court has to accept the one that seeks to eradicate corruption to the one which seeks to perpetuate it.’’
 
Hence, the DoPT, in its circular dated 21 July 2016 has sought the opinion of chief secretaries of all States, by 12th August on its draft version of citizen empowerment to prosecute officers from the Indian Administrative Services (IAS). The circular gives reference of the SC judgment in the Civil Appeal (No.1193 of 2012 (in SLP (C) No.27535 of 2010) in the Dr Subramanian Swamy versus Dr Manmohan Singh case. It says, “It has been decided to solicit public opinion/ comments in respect of processing of proposals/ requests received from private persons for sanction for prosecution of an IAS officer serving in the State Government/ Central Government under the Prevention of Corruption Act 1988.”
 
The DoPT has provided the draft instructions for the perusal of these top bureaucrats of every state and union territory and asked them to send their proposals, in case they do not agree with the opinion of this draft version.
 
As per the recommendations of the SC, the DoPT says that a complaint from a citizen, even if it is without documents or any other proof, should be taken seriously. The relevant authority must reply to the citizen within three months of his complaint. However, in case the citizen is not satisfied with the reply, he is free to seek legal advice. 
 
Following is the draft sent by the DoPT:
 
  • The Apex Court further observed that "If the Competent Authority is satisfied that the material placed before it is sufficient for prosecution of the public servant, then it is required to grant sanction. If the satisfaction of the Competent Authority is otherwise, then it can refuse sanction. In either case, the decision taken on the complaint made by a citizen is required to be communicated to him and if he feels aggrieved by such decision, then he can avail appropriate legal remedy".
     
  • It was also observed by the Supreme Court in the matter that, “At the same time, we deem it proper to observe that in future every Competent Authority shall take appropriate action on the representation made by a citizen for sanction of the prosecution of a public servant, so as to ident0 and obviate the areas causing delays in processing of such proposals ...”
     
  • Pursuant to the decision, this Department is in receipt of requests from private persons seeking sanction for prosecution in respect of officers for which DoPT is the Cadre Controlling Authority without any proper proposal and supporting documents.
     
  • It is observed that such requests, as are received from citizens are more in the nature of complaints sans any supporting details, evidence, which can at best merit inquiry of substantial facts as are evidenced i.e. such requests are without any proposal and supporting documents. 
     
  • In this connection, it may be appropriate to stress that, the Competent Authority has to take a decision as regards grant or otherwise of a sanction for prosecution requested for, in terms of provisions of section 19 of the Prevention of Corruption Act, 1988. 
     
  • The existing guidelines as are already in place to consider such cases received from investigating agencies. The instructions have been issued vide letter No.142/4/2012-AVD.I dated 28 July 2014 and 20 May 2016. These guidelines lay down the procedure to deal with the proposals received from investigating agencies through Single window system.
     
  • Keeping in view the basic parameters and requirements for cases received from investigating agencies, it has been decided that the procedure for handling the requests for prosecution sanction received from the private persons may be streamlined as indicated below.
 
a) A proposal from a private individual seeking sanction for prosecution of an IAS officer serving in the State Government may be routed through the concerned State Government as such State government is best placed to provide basic inputs as regards the alleged misconduct of the concerned public servant who is or was working under its administrative control. 
 
b) In case a proposal is received directly by DoPT by such private individuals will be forwarded to the State Governments for the preliminary examination by such State Government vis-à-vis the relevant records.
 
c) If there is a prima facie case against an IAS officer, the State Government should prepare a detailed report and consider obtaining the version of the concerned officer. Such report, along with all relevant records, and evidence should be forwarded to DoPT with the approval of the Competent Authority in the State Government.
 
d) In case the concerned State Government, after examination of relevant records, and other evidence is of the view that prima facie no case is made out of any alleged misconduct which may constitute an offence under the Prevention of Corruption Act, 1988, that State Government shall inform the person who has made a request for sanction for prosecution under the said act and endorse a copy of the same to this Department.
 
e) If a report, along with all relevant records and evidence with the approval of the concerned authority is received, wherein a prima facie case is made out, the same will be treated as a proposal as per existing procedures/ guideline issued vide letter no.142/4/2012-AVD. I dated 28 July 2014 and 20 May 2016 to initiate action for processing the matter for decision of the competent authority.
 
f) A period of three months period for disposing of such proposals would commence from the date of receipt of complete proposal with all relevant material and the aforesaid report from the concerned State Governments. 
 
Here is the circular issued by the DoPT…
 
 
(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)

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COMMENTS

N.Hanumanta Rao

10 months ago

If the State/Central Govt.is the CA to sanction, the Govt.will certainly protect their Civil servants, and hence the Bonus go scot-free. Ironically such corrupt Babus get promotions and plum posts, being favorites of the rulingparty.

Avinash Murkute

10 months ago

Opinion what opinion! They did not act when everything is crystal clear and thus protected Bribe Generation.

manoharlalsharma

10 months ago

It is impressive to read but tough to follow as age factors for inordinate delay in implement as we read 2012 order in 2016,do u know to get a Housing Society NOC we 316 members r awaiting 14-15 years as off QUASI JUDICIAL orders cancelled or Stayed by Concerned ministers and ultimately we again in HC with WP-8508/2003 the order was issued against the HC order WP-4481/2001,so peoples compel to pay BRIBE or SALE at discount rather then go to HC.

N.Hanumanta Rao

10 months ago

The IAS/IPS have strong unity among themselves. For example, a Chartered Accountant is an authority in Taxation, Audit,enterprise value, transfer pricing and accounts. However, B.A/Bcom passed IAS puts such subordinates to insult/inconvenience. Further more, if the competent authority is the Central/State Govts. They protect their officers and never give sanction for prosecution. In fact at least 50℅ of AIS officers have ill-gotten money worth crores. They cite the example of their political bosses who own more than 200crores each.From my personal experience I can say that a former MLA/M.P. will maintain a cavalcade of 4/5 Tata Sumos.

Hence seeking sanction from State/Central Govts is but farce.

Sudhir Jatar

10 months ago

A very lucidly written article. However, our experience is that the hurdle is not in initiating a case but in getting it to conclusion in a court of law. In most of the PILs, it is some bureaucrat or another accountable for the wrongs, which result in corruption. However cases go on for decades and we are told, the bureaucracy is so swift as to ensue that cases do not even come up for hearing for years on end until the bureaucrat retires. So why not first carry out judicial reforms so that cases are expedited. But we have here a government, which is in confrontation with the highest judiciary and objects to appointments of judges recommended by the Collegium.

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