International Journal of Business Ethics in Developing Economies

Sreekumar Ray ¹

Affiliations
1 Department of Commerce, The Bhawanipur Education Society College, Kolkata, West Bengal, IN

Abstract

Since inception, the growth of the Indian stock market has been constrained through unethical, illegal and self-actualised activities of swanky persons involved in different capacities in the market. The stock market was trying to retrieve itself from the devastating effect of Harshad Mehta share market scam, when within a gap of ten years it was once again pushed into the darkness of the dungeon by another demon-child of the country - Ketan Parekh. Corporations have been looted by the insider traders, diversifying internal information to an external in lieu of 'cash'. Investigations in the majority cases have proved the involvement of the high ranking officers of the companies in the crime, sophistically referred to as "white-collar crime". It has an adverse impact on the growth and sustainability of the share market.

Under the light of the above issue, this paper endeavours to study the impact of such crime on the share market. It focuses on the mechanism behind the insider-trading, its impact on the share market and the regulators supervision on the issue. Finally, suggestions have been provided which will contribute towards the dream of every Indian-a fraud-free share market focusing towards the overall development of the country.

Keywords

White-Collar Crime, Insider Trading, Share Market, Unethical, SEBI Regulations.

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Sreekumar Ray ¹

Affiliations
1 Department of Commerce, P.G. Department of Commerce, The Bhawanipur Education Society College, Kolkata, West Bengal, IN

Abstract

'Ethics in Business' are keywords in any business environment which are lacking in most of the cases. In a broad sense ethics means not to cheat others and to do the business in an honest way, to abide by the rules and regulations of the soil, and above all to keep the morale high so that the business can grow to a new height in long run. Unfair means and unethical business practices to earn money quickly are often fraught with the danger of losing the business permanently or losing the goodwill and respect of society. West Bengal has got bad reputation for industrial growth and fake chit funds and it has been named as 'ponzy capital' of India by many as 72 out of 86 fake chit funds are in the state of West Bengal (as per the Report of Ministry of Corporate Affairs, Govt. of India). On the other hand the micro finance company 'Bandhan' which has got Banking license last year(set up in 2001 in West Bengal) and 'Eins Edutech' the company which was originally incorporated on March 9, 1983, as GanpatUdyog in West Bengal are worth mentioning and at ease one can feel proud of them. As on 17th April, 2015 the latter company has got market capital of Rs.700 crore with its fixed assets, as per its balance sheet, as only two cell phones and one printer. As per monthly status of Bandhan in February 2015 it has 2,022 branches, 63,66,269 borrowers, 15,956 staff, loan disbursed for the month Rs.1,572crores, and loan outstanding Rs.8,908 crores. Under such situation, this study focuses on the ethical business environment prevailing in West Bengal and the strategies adopted by them.

Keywords

Ethics, Morale, Unfair Means, Ponzy, Micro Finance, Banking License.

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