White Collar Crime in India: An In-depth Analysis

White Collar Crime in India: An In-depth Analysis

Author - Tarushi, a Student of Saraswati institute of law

Introduction:

White collar crime, a term coined by the American criminologist and sociologist Edwin Sutherland in the 1930s, refers to non-violent illegal activities for financial gain that are often committed by individuals of high social status in the course of their business or profession. In this research article, we delve into the various aspects of white-collar crime in India, its impact on society, and its different forms, including black collar and blue-collar crime.

Definition of White-Collar Crime:

White collar crime encompasses a wide range of financial crimes, and its primary objective is to obtain money, property, or gain a personal or commercial advantage without resorting to violence. Typically, individuals in influential positions such as CEOs and management engage in these illicit activities, which can result in substantial financial losses for citizens. Common examples include bribery, money laundering, fraud, and insider trading.

Black Collar Crime:

In contrast to white collar crime, black collar crime is often associated with religious or judicial figures involved in traditional misconduct. These crimes are non-violent and are typically motivated by financial gain. Offenses such as fraud, forgery, and corruption fall under the purview of black collar crime and can have serious implications for trust in religious and judicial institutions.

Blue Collar Crime:

Blue collar crime pertains to criminal activities more likely to be committed by individuals from lower socio-economic classes. These offenses typically involve bodily harm or property damage and can include crimes like burglary, theft, assault, sex crimes, and drug-related offenses. Understanding the distinctions between blue collar and white-collar crime is crucial for developing effective law enforcement strategies.

Professional Crime:

White collar criminality is not limited to corporate settings; it extends to various professions, each with its unique set of challenges. Here are a few examples:

1. Medical Profession: White collar crimes in the medical field may involve issuing false medical certificates, engaging in illegal abortions, medical negligence, or even determining pre-natal gender, all of which have serious consequences for patient safety and trust in healthcare.

2. Legal Profession: Crimes in the legal field can include making false claims, fabricating evidence, or presenting fake witnesses in court, undermining the integrity of the justice system.

3. Engineering Profession: Engineering professionals may engage in white collar crime by using substandard materials in construction projects, compromising safety and quality standards.

4. Educational Institutions: White collar criminality in educational institutions can adversely affect the standard of education. Practices such as collecting exorbitant sums of money from students in the name of donations for admission erode the credibility of the education system.

Related case laws: -

1. Harshad Mehta Securities Fraud (1988-1995)  

Harshad Mehta was a stockbroker who founded Grow More Research & Asset Management Limited, a security company, in 1990. Investors blindly followed him as he was well-known back then with the title “Sultan of Dalal Street” of the Stock market. Harshad Mehta was involved in a massive stock manipulation scheme financed by worthless bank receipts. He used techniques such as signing fake cheques, and misusing market loopholes & fabrication to raise the stock prices up to 40 times their original price. Thus, the Stock traders making good returns from this scam fraudulently gained unsecured loans from banks.

2. Satyam Scandal

This was the biggest-ever corporate accounting fraud by B. Ramalingam Raju, who was the founder and chairman of Satyam Computers Services Limited. He wrote a confession published in the Times of India in 2009, revealing this scam. In the letter, he accepted the fact that he tampered with his books of accounts by inflating assets and understating liabilities. We know that a company’s financial condition is judged from its books of accounts, and before making any investment, investors rely on this book so, falsifying it to defraud shareholders and investors is obviously a crime which Raju committed. In order to ensure that a similar scam never happens again, SEBI responded to this matter strongly.

Conclusion:

White collar crime in India poses significant challenges to society, impacting financial stability, trust in institutions, and the overall rule of law. Understanding the nuances of different types of white-collar crime, such as black collar and blue-collar crime, is essential for law enforcement, policymakers, and the public. Efforts to combat these crimes should be aimed at not only holding individuals accountable but also at preventing them through education and stricter regulations.