CORPORATE CORRUPTION AND THE PREVENTION OF CORRUPTION ACT, 1988: LOOPHOLES AND LEGAL REMEDIES

Abstract

Corporate corruption is a major issue that harms businesses, the economy, and society. It includes unethical practices like bribery, fraud, embezzlement, and misuse of power for personal or business gain. Despite legal frameworks like the Prevention of Corruption Act, 1988 (PCA), corruption remains widespread in India. A 2024 survey found that 66% of Indian businesses admitted to paying bribes in the past year. High-profile cases like the Adani bribery allegations and scams involving Satyam Computers, Nirav Modi, and Vijay Mallya highlight the seriousness of the problem. The PCA was introduced to prevent bribery, especially in dealings with public officials. However, its effectiveness is limited due to weak enforcement, lengthy legal procedures, and difficulties in proving corporate wrongdoing. The 2018 amendment to the Act introduced corporate liability, stricter penalties, and provisions for confiscating assets gained through corruption. Yet, corruption persists due to loopholes in the law, lack of transparency, and political influence over investigative agencies. Other legal measures, such as the Companies Act, 2013, the Prevention of Money Laundering Act, 2002, and the Whistleblower Protection Act, 2014, aim to combat corporate corruption. Regulatory bodies like the Central Bureau of Investigation (CBI), Securities and Exchange Board of India (SEBI), and Enforcement Directorate (ED) play key roles in investigating fraud and financial crimes. However, their effectiveness is often hindered by bureaucratic inefficiencies and political interference. A comparative analysis with international anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the UK Bribery Act, shows that India needs stricter enforcement, better corporate accountability, and stronger whistleblower protection. Strengthening legal frameworks, promoting transparency, and ensuring independent regulatory oversight are crucial to reducing corporate corruption and improving business ethics in India.