To check possibility of frauds in private companies, Vigilance Commissioner J M Garg today said there is a need to evolve risk management system in the private sector.
"In the absence of corporate risk management system in the private sector, if a corporate fraud is performed by an employee of any private industry, it is the promoters of that particular organisations and their directors (who) will be held liable for the fraud committed and subjected to stringent scrutiny of law," he said addressing members of the Managing Committee of the PHD Chamber of Commerce and Industry here.
Therefore, the corporate entities ought to evolve a system as early as possible and put it in place so that no corporate frauds could be committed, Garg said.
The Vigilance Commissioner in the Central Vigilance Commission (CVC) said it would be only possible if management keep strict control on its employees through proper monitoring system.
He cited the Companies Act 2013, in support of his point, which makes corporate governance more transparent with stringent provisions.
Garg told the members that the industry especially Public Sector Undertakings (PSUs) both in central and states domain should not unnecessary fear the CVC as it usually examines cases of procurements of amount exceeding Rs five crore out of the total of Rs 25 lakh crore of annual procurements of such units, said a press release issued by the Chamber.
