CORPORATE CRIMES AND ITS ROLE IN ECONOMIC DEPRESSION

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By Ayushman Verma from S R M S College of Law, Bareilly, UP

INTRODUCTION

‘Corporate crimes kill far more people and costs, taxpayers, far more money than street crimes once‘ said by Anita Roddeck, a great American businesswoman. The statement is very true in this modern era. When a thief tries to commit theft with someone, it causes loss to only a particular person but when a white-collar person commits a scam in making of an over-bridge then it may take the life of hundreds of people, though not being a professional thief, without using a knife or a gun, not only can take life but also act as an obstacle in the growth of a country.

In the wake of rapid growth in industrialization, a new form of criminality is evolved which is gaining popularity among criminals day by day. See the irony: the corporate is born and developed out of the society but in return gave a new form of crime to it. Corporate is being accused of creating nuisances in society from a long way. Today they have become necessary evils as the society cannot survive without them. 

Corporate crimes are the white-collar crimes which are committed by individuals within their occupations for the benefit of their organization and themselves. But these white-collar criminals do not consider themselves as criminals as they do not consider their activities criminals

Money laundering, scams, privacy frauds, nuclear disasters, bribery, and violence, etc. are the few examples of these types of crimes. The new interpretations of the courts, new legislation by the government about the law are only the result of these very new characters of these types of crime.

CONCEPT OF CORPORATE CRIMES

“Corporate crime is the conduct of a corporation or of its employees acting on behalf of the corporation, which is prescribed and punished by law.” once quoted by  J. Braithwaite.

The white-collar crimes are generally divided majorly into two types of corporate crimes and occupational crimes by different criminologists. Occupational crimes are those committed for their own benefit during the course of occupational activities. Corporate criminals generally do not consider their activities as those of criminal ones as they become a part of their occupational activities. These criminals generally remain conventional to the society, their wrong behavior is indirectly approved by the culture of the society, this can be understood easily, as in some places it is a belief or view that if someone is a government employee, he must be a corrupted official. 

A corporation is itself treated as a person i.e. have separate legal status and are treated as a separate personality in law. And because the same corporations can be imposed with separate liability, for which the individual members can be held liable for the same. ‘actus non facit reum nisi mens sit rea means’, the legal maxim, the basic rule applicable in every criminal case, which means that the act will be considered wrong-full only if it is done with the wrong state of mind, in other words, it means there should be an intention behind committing the wrong act. The companies are held liable for the wrong which happens during the business activities also for which it bears any responsibility. 

In general circumstances, the face of the corporate criminal is separate from the company but in the modern era, the faces are hidden behind the company and got saved from being punished. But now it is the time to make a company liable for its criminal wrongs and its liability to be addressed.

The corporate sector of today’s includes many aspects. Each and every aspect is affected by the wrongs committed by this sector. The common men have to pay for the wrongs of the company, then the common man may be the consumer or a person from the same company or any other person but are affected directly or indirectly. Even the State who receives  economic returns from it faces a dual loss when corporate is found guilty of a crime in the shape of employment and revenue loss and the loss faced by the society

THE SCENARIO IN INDIA

The scene of corporate crimes in India is that with the changing decade the rate of corporate crimes is also increasing. The fast growth of Industries and technologies may be one of the notable reasons behind this increase.

The most famous Bhopal Gas Tragedy case which took the lives of 15000 people, injuring near about five lakh others. The cause behind the tragedy was the extreme corporate malfeasance, the plant was not up to the minimal union carbide safety standards-large quantities of MIC were stored in populated areas. The tragedy took place in 1984 and the accused were convicted in 2010, The effect of the tragedy was so devastating that today in the time of COVID-19, the survivors of the tragedy turned into COVID Victims. 

In recent, The Bombay Stock Exchange has vanished 2750 companies from a list of 5651 listed. Which means one out of every two companies comes to raise money from investors and run away. 

What was the need of SEBI, prevention of corruption act, prevention of money laundering act, etc. their existence proves the increasing rate of corporate crimes in India. 

The Sahara India Case, The PMC scam, etc. the rate is only increasing day by day.

CORPORATE CRIME AND THE ECONOMY

Due to rapid urbanization and industrialization in the technologies the corporate crimes have been increased and in many of the developing countries, it results in an economic depression.

Economic depression is generally defined as a period of recession which may last up to 3 to 4 years and lead to a decline in the GDP badly. An economic depression may also be defined as an occurrence where an economy is in a state of turmoil. It is a greater concept than the mild recessions and lasts for many years, for example, the great depression lasted for near about 10 years in the United States. 

Generally stock market crash, decrease in manufacturing sectors, control of prices and wages, deflation, oil price hike and loss of consumer confidence, etc. are the main causes of economic depression but in this modern era, a new cause is evolved named Corporate Crimes.

Now here the question arises: how do corporate crimes play a role in creating a way for economic depression? An increase in corporate crimes means the more loss of wealth of the people of the country, nowhere the question arises how this loss should be covered? the ultimate burden to cover this loss is only on the government. So the developing countries with increasing corporate crimes are not able to cope up with the loss and the ultimate result of which is economic depression.  

This can be understood easily by the Punjab National Bank Case, in This case, the accused committed the fraud of nearly (US$ 2.1 billion), in this case, the government is responsible to cover this loss if the economy of the country is capable enough then it can cover the loss but if not the result is economic depression.

The concept is the same in every case.

CONCLUSION

According to me, corporate crimes are the most common evils of society, these are those evils to whom one cannot identify easily. Corporate crimes refer to those criminal activities committed by the corporation or by individuals on behalf of the corporation for their own benefit  punishable in the eyes of the law. The legislature of the country has taken many steps for the prevention of these crimes then may it be the prevention of corruption act, prevention of money laundering act or the establishment of agencies like SEBI, etc. but then also why the rate is increasing. In my opinion, the government should recheck its policies, should find and fill up the hole from where these criminals are escaping.  

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