Mumbai: Despite the government’s efforts to eradicate corruption and make India an investment destination, according to the Kroll Annual Global Fraud and Risk Report, 19 per cent of the surveyed senior executives worldwide were dissuaded from operating in India due to existing concerns over fraud. This is second only to China.
Despite a small fall from previous year, 73 per cent of Indian respondents have reported experiencing a cyber incident in the last one year. Another trend seen compared to last year is that 68 percent of respondents with operations in India experienced a fraud incident in 2016 which is a decrease from 80 percent seen in 2015.
Junior employees in Indian companies and intermediaries working for Indian companies were identified as the primary perpetrators of fraud incidents in India.
The fact is fraud still seems to be prevalent across companies. These were 3 percent more prevalent in India than the global average of 69 percent, which is consistent with Kroll’s experience on the ground. “The security risk is still a concern for most investors. A fifth of the respondents said that they are dissuaded from investing in India because of security risks,” said Reshmi Khurana, MD and Head of South Asia for Kroll. She added, “The fact is India is an attractive destination for foreign investors given that it is one of fastest growing emerging markets. However, as our survey indicates, investors are deterred due to fraud, corruption and security concerns.”
The important factor is that in case there have been cyber incidents in India, till now the trend has been not to take help of the security agencies or even outsource the solving of issue. However, there seems to be slight improvement in this category.
As compared to last year, a greater percentage of respondents in India reported fraud across the four categories surveyed – corruption and bribery (27 per cent), management conflict of interest (27 per cent), market collusion (27 per cent) and internal fraud (25 per cent).
For the Global Fraud & Risk Report, Kroll commissioned Forrester Consulting to conduct an online survey and 10 interviews with 545 senior executives worldwide across multiple industries and geographies. The survey was fielded through July and August 2016. Respondents held senior positions within their companies, with 70 per cent of respondents representing the C-suite. Sixty-one percent of companies had annual revenues of USD 500 million or more.
Respondents represented all major global geographies, including 25 percent from Europe, 20 per cent from Asia-Pacific, 20 percent from North America, 19 percent from Africa / The Middle East, and 16 percent from Latin America.
