Employees aware of corruption in their companies: Report

BANGALORE: Most employees are aware of unethical business conduct in their organisations,but feel the onus of handling corruption lies with the senior management, a report by industry body FICCI said today.

The report titled ' Bribery and Corruption: Ground Reality in India' also said sectors that are most vulnerable to corruption include government & public sector, real estate, infrastructure, metals & mining, aerospace & defence, and power & utilities.

Corruption, real or perceived, is having a detrimental impact on the country's economy, the report prepared by FICCI in association with Ernst & Young added.

According to 73 per cent of respondents from private equity firms, a company operating in a sector that is perceived as highly corrupt may lose when it comes to a fair valuation of business, as the cost of corruption in the sector will be factored in a transaction.

Around 77 per cent respondents felt it is the responsibility of the managing directors to handle the bribery and corruption-related issues in their organisations.

Around 83 per cent of the respondents felt that the recent spate of scams will negatively impact FDI inflows into the country.

Stating that complicated taxes and licensing system also fuel corruption, the report said more than half of the respondents felt that it is lack of will to obtain licences and approvals the "right way," which leads to bribery and corruption.

It said most people were also aware of unethical business conduct in their organisations, including irregular accounting to hide bribery and corruption, gifts being given to agents and third parties being used to pay bribes.

While the government has proposed amendments to existing Acts and certain new Bills are on the anvil that are aimed to check corruption in the private sector, the report suggests that enforcement of laws is equally important.

The survey states around 89 per cent of the respondents felt that inadequate enforcement of laws is resulting in bribery and corruption proliferating in the country.

"Companies will have to ensure high level of transparency in business conduct and take a steadfast long-term view to resist the pressure or temptation to pay bribes" EY Partner & India Leader - Fraud Investigation & Dispute Services Arpinder Singh said.