Dr. Justice V.S. Malimath Report First pages - Ministry of Home Affairs

233
ECONOMIC CRIMES _
20.1 In the earlier centuries, economies were simple and so were
economic crimes. In the last century, with the emergence and complexity of
industry and modern capitalism, economic crimes have increased in number and
complexity. More recently with the far-reaching recent changes in technology
and the emergence and change in the institutions and in the organisation of the
economic system, there has been a dramatic increase in the numbers and the
cost of economic crime. There has always been a public tendency to focus on
conventional crimes, especially violent ones, and except for occasional cases
such as the Harshad Mehta, Ketan Parekh and the Indian Bank scam (of over
Rs.800 crores), most economic crimes go insufficiently noticed, though their
impact in terms of financial loss to the Society and in terms of eroding the
credibility as well as the stability of the economic system is significant. With
the fast pace of advances in technology (and the Internet), that are changing the
way in which Government and Businesses operate and with quicker decisionmaking,
the impact is increasing. Though reliable statistics are hard to come by,
there have been major frauds, particularly in banking and the stock market
(often together) and in a lesser way, in credit card and computer crime, as well
as in some other areas. Apart from the
well known ones, there have been others
such as the forged Kissan Vikas Patras,
Indira Vikas Patras and National Savings
Certificates, the Gold scam case of
Ahmedabad, Cyberspace case of Unit
Trust of India and the Century Consultants
Limited case of Lucknow. Further, the vast
erosion in the value of Unit Trust of India
(UTI) stocks which cannot be attributed
Though reliable statistics are
hard to come by, there have
been major frauds, particularly
in banking and the stock market
(often together) and in a lesser
way, in credit card and
computer crime, as well as in
some other areas.
just to changes in the market is yet another example. There was also the case of
the failure of Non-Banking Financial Companies (NBFC), but, that was partly
the creation of regulatory agencies, which did not handle the matter properly.
The list is illustrative and is not exhaustive.