UNIT- 12_Applied Ethics_Unethical Practices in Business.pdf
- 1. Applied Ethics: Unethical Practices in Businesses
- 2. Defining Bribery Bribery is defined as: the offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal, unethical or a breach of trust. Bribery, abuse of power, extortion, fraud, deception, collusion, cartels, embezzlement and money laundering are all forms of corruption.
- 3. What Is a Conflict of Interest? A conflict of interest occurs when an individual's personal interests – family, friendships, financial, or social factors – could compromise his or her judgment, decisions, or actions in the workplace. Such a conflict occurs when a company or person has a vested interest—such as money, status, knowledge, relationships, or reputation—which puts into question whether their actions, judgment, and/or decision- making can be unbiased.
- 4. What is Corruption? Corruption is the misuse of public power (by elected politician or appointed civil servant) for private gain. In order to ensure that not only public corruption but also private corruption between individuals and businesses could be covered by the same simple definition Corruption is the misuse of entrusted power (by heritage, education, marriage, election, appointment or whatever else) for private gain.
- 5. Causes of Corruption in India Low Pay Scales And Wages Lack of Stick And Fast Punishments Lack of Unity in Public Lack of Fundamental Rights Awareness in People of India Lack of Transparency in Deals and Affairs Lack of Independent detective agency Lack of enough powers to the judicial system in India Lack of Accountability Unhealthy Competition Encouragement in India Lack of Effective Management and Implementation Lack of Economic Stability In India Lack of Effective Leadership in India
- 6. Lack of Autonomy Unemployment Poverty And Hunger Very Less Educational Institute and Medical Infrastructure . Vast Size of Population in India Is Biggest Cause of Corruption In India . Another Big Cause of Corruption In India Is nexus between political parties and Industrialist. Emergence of political elite who believe in interest-oriented rather than nation-oriented programmes and policies is Another Big reason of Corruption in India . Tolerance of People Towards Corruption is a Another big reason for Corruption In India.
- 7. Consequences of Corruption Rise in Unemployment Rise in Hunger and poverty Loss of Indian Economy Wealth Fall in growth of Indian Economy Power and Authority in Wrong hands Brain Drain is Biggest Consequence for India Psychological And Social Disorder Corruption is also the main cause of Poverty as Rich are getting richer & poor are getting poorer. Not all the packages, compensation announced by government reach the minorities and backward communities.
- 8. How can We Cure Corruption in India Give Good salary to Government Employees Bring transparency In Indian Economic System Try To make Indian Society Cashless More Number of Online transactions and provide bill For Every transactions Bring Political parties Under RTI Set Eligibility For Indian Politician Increase in Digital And E Governance Transparent tax structure by clean and clear enforcement More Police reforms and Power Full Judiciary Blacklist Corrupt Businessmen Bring More Transparency In Govt Job Recruitment Keep Inflation low Speed up the judgement and increase the courts
- 9. 8 Effects of Corruption Lack of quality in services Lack of proper justice Chances of Unemployment Poor Health and hygiene Low growth rate of Economy Low Foreign Direct Investment Low Development Rate Low Standard of Living
- 10. Steps taken by Indian government The biggest step is demonetization i.e. banning 500 and 1000 rs notes which is the route of all evil, be it Corruption, Black Money, Terrorism. Under “Right to Information Act (RTI)“, citizens can now ask government about how out ta money is spent. With “Jan Dhan yojana” & “Direct Benefit Transfer” schemes, bank accounts of millions of people were opened so that they can get subsidies and benefits directly into their account. E-Auctions for spectrums and natural resources is a good step towards a corruption less India.
- 11. Government is focusing more on Digitizing, which will lead to more transparency in functioning of government. Government introduced self-attestation of certificates and has removed interviews from lower posts, so no one can bribe their way through interview to jobs. Another potent check on corruption is Central Vigilance Commission (CVC). It was setup by the Government to advise and guide Central Government agencies in the areas of vigilance.
- 12. Anti-corruption laws in India Indian Penal Code, 1860 Prosecution section of Income Tax Act, 1961 The Prevention of Corruption Act, 1988 The Benami Transactions (Prohibition) Act, 1988 to prohibit benami transactions. Prevention of Money Laundering Act, 2002.
- 13. INSIDER TRADING Insider trading essentially denotes dealing in a company’s securities on the basis of confidential information relating to the company which is not published or not known to the public used to make profit or loss. It is fairly a breach of fiduciary duties of officers of a company or connected persons as defined under the SEBI regulations,1992, towards the shareholders.
- 14. Insider terms actually includes both legal and illegal conduct. The legal version is when corporate insider officer, directors, and employees buy and sell stock in their own companies. when corporate insiders trade in their own securities, they must report their trades to SEBI. Illegal insider trading refers generally to buying or selling a security , in breach of fiduciary duty or other relationship of trust and confidence, while in possession of material, non public information about the security.
- 15. Who is an insider? The Sebi defines an ‘insider’ as someone who has access to price-sensitive information about a particular company's shares or securities. An insider can be anyone who has been associated with the company in some way during the six months preceding the insider trade.
- 16. Who are insider traders? Corporate officers, directors , and employees who traded the corporations securities after learning of significant, confidential corporate developments. Friends, business associates, family members, and other types of such officers, directors, and employees, who traded the securities after receiving such information.
- 17. Employees of law, banking , brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded. Govt employees who learned of such information because of their employment by the govt. Other persons who misappropriated ,and took advantage of, confidential information from their employers.
- 18. Why forbid insider trading? • The prevention of insider trading is widely treated as an important function of securities regulation. • In order to make sense of insider trading , we must have basic understanding of markets, prices and role of markets in the economy. • Insider trading appears unfair, especially to speculators outside a company who face difficult competition in the form of insider trading.
- 19. History behind Insider Trading Regulation in India • Insider trading in India was unhindered in its 130 year old stock market till about 1970. • In 1979 , the Sachar committee recommended amendments to the companies Act,1956 to restrict prohibit the dealings of employees . Penalties were also suggested to prevent the insider trading. • In 1986 the Patel committee recommended that the securities contracts Act ,1956 may be amended to make exchange curb insider trading and unfair stock deals.
- 20. • In 1989 the Abid Hussain committee recommended that the insider trading activities may be penalized by civil and criminal proceedings and also suggested the SEBI formulate the regulations and governing codes to prevent unfair dealings. • India through SEBI regulations 1992 has prohibited this fraudulent practice. • These regulations were drastically amended in 2002 and renamed as SEBI regulations 1992.
- 21. Investigation of Insider Trading • Regulation 4(a) deals with the request for the enquiries. • SEBI can also appoint the outsider auditor for the enquiry auditor would have the same power as the SEBI possess. • Before undertaking any investigation under regulation (5) SEBI shall give a reasonable notice to insider for that purpose. • Where SEBI is satisfied that in the interest of investors or in public interest no such notice should be given, it may by an order in writing direct that the investigation be taken up without such notice.
- 22. SEBIs Power to make inquiries and inspection • Regulation 4A • If the SEBI suspects that any person has violated any provision of these regulations, it may make inquiries with such persons. • The SEBI may appoint officers to inspect the books and records of insider(s) for the purpose of inspection. • The SEBI can investigate and inspect the books of account, either records and documents of an insider on prima facie. • SEBI can investigate into the complaints received from investors, intermediaries or any other person on any matter having a bearing on the allegations of insider trading.