Chapter 17
* The author is indebted to Ms Reshama Deshmukh, Mr R. Dwarakanathan, his colleague and his banker-friend, Mr. C. Radhakrishnan for the inputs provided by them for writing this chapter.
* Badla is an Indian equivalent of the carry-forward system. Badla trading involves buying stocks with borrowed funds, in which the stock exchange acts as an intermediary. The interest rate is determined by the demand for the stock in question. The Badla trader can borrow for a maximum period of 70 days, after which he or she has to repay the financier through the Exchange. Badla system was devised by the Bombay Stock Exchange as a means of solving the permanent problem of lack of liquidity in the secondary market that deals with buying and selling of old stocks and securities. In essence, the Badla system allows investors to buy stocks without large cash outflow. SEBI banned Badla trading in 1993 due to several complaints received from foreign investors. It was legalized again in 1996 and banned permanently on 2 July 2001, after the introduction of the futures market.
1. Gary Giroux, “Accounting History Page,” available at http://acct.tamu.edu/giroux/history.html
2. Joint Publication 1–06 “Joint Tactics, Techniques and Procedures for Financial Management During Joint Operations,” 22 December 1999, available at www.dtic.mil/doctrine/jel/new_pubs/jp1_06.pdf
3. John R. Boatright, Ethics and Conduct of Business, 4th ed. (New Delhi: Pearson Education, 2003).
4. John R. Boatright, Ethics in Finance, 1st ed. (Oxford, UK: Blackwell Publishing, 1999).
5. Wockhardt CFO held guilty of insider trading, Business Standard, 12 December 2008.
6. Adam Graycar, “Fraud Prevention and Control in Australia,” Paper presented at the conference on Fraud Prevention and Control, 24–25 August 2000, Gold Coast, Australia.
7. R. P. Nainta, Banking System, Frauds and Legal Control (New Delhi: Deep & Deep Publications, 2005).
8. Ibid.
9. Correspondent, A Report, “Notice to Banks for Delay in Crediting Cheques,” The Hindu, 4 September 2006.
10. Staff reporter, “Man Cheats Banks of Rs. 1.50 Crore,” The Hindu, 7 September 2006, available at www.hindu.com/2006/09/07/stories/2006090719230300.htm
11. “Phishing Attacks and How to Avoid Them,” available at www.indianbank.net.in/jsp/Phishing&SecurityTips.htm
12. Edgar (2002) “Telstra Corp. 6-K” Securities and Exchange Commission, available at www.secinfo.com/dvtJ1.3x.htm
13. S. P. Subhedar, “Possibilities of Fraud in Life Insurance,” Faith Betrayed, IRDA Journal (Vol. IV No. 8, July 2006): 7–9.
14. Ibid.
15. Ibid.
16. Dalip Varma, “An Overview of Insurance Frauds, Measures to Combat the Menace,” Faith Betrayed, IRDA Journal (Vol. IV No. 8, July 2006): 10–12.
17. Arman Oza, “Fraudulent Intentions in Insurance, A Matter of Human Psyche?” Faith Betrayed, IRDA Journal (Vol. IV No. 8, July 2006): 17–19.
18. V Ramakrishna, “Forcing a Stricter Regime, Frauds in the Insurance Industry,” Faith Betrayed, IRDA Journal (Vol. IV No. 8, July 2006): 20–22.
19. See Note 4.
20. Ashutosh Sinha, “Xeroxing Corruption,” India Resource Center, 30 September 2002, available at www.indiaresource.org/issues/globalization/2003/xeroxingcorruption.html
21. Bureau, “Raj Basantani Group to Face Prosecution for Fraud,” The Hindu Business Line, 25 January 2006, available at www.blonnet.com/2006/01/25/stories/2006012501621500.htm
22. Martin LaMonica, “Former CA Chief Kumar Pleads Guilty to Fraud,” CNET news.com 24 April 2006, available at http://news.com.com/Former+CA+chief+Kumar+pleads+guilty+to+fraud/2100-1014_3-6064516.html
23. Stephen Taub, “Charges for ex-CFO of Network Associates,” CFO.com, 18 June 2004, available at www.cfo.com/article.cfm/3014667/c_3042596?f=TodayInFinance_Inside