EMBEZZLEMENT AND BUDGET MISUSE IN PRIVATE INSTITUTIONS: CAUSES AND PREVENTION
AUTHOR – MR. SIDDHARTH BANKAL & MR. MRUTYUNJAY SARAMANDAL
STUDENTS AT HIDAYATULLAH NATIONAL LAW UNIVERSITY, RAIPUR
BEST CITATION – MR. SIDDHARTH BANKAL & MR. MRUTYUNJAY SARAMANDAL, EMBEZZLEMENT AND BUDGET MISUSE IN PRIVATE INSTITUTIONS: CAUSES AND PREVENTION, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (13) OF 2025, PG. 130-138, APIS – 3920 – 0001 & ISSN – 2583-2344.
This study investigate the problems of embezzlement and misuse of funds in private companies, explored by the lenses of company law and corporate governance. The paper discusses the pervasiveness of unethical activities like fraudulent invoicing, ghost employees, and accounting manipulation, which tend to flourish when internal controls are lacking and board-level monitoring is deficient. In addition, the study highlights the deficiencies inherent in the company law of India, including the limited enforcement of fiduciary obligations, the lack of adequate independence of audit panels, and the limited protection for whistleblowers. Through the inclusion of comparative studies from the United States’s Sarbanes-Oxley Act, the UK Corporate Governance Code, and the OECD Principles of Corporate Governance, the study shows that strong compliance systems and liability mechanisms can significantly reduce the likelihood of misconduct.
The research adopts a doctrinal and comparative methodology as it is based on statutes, judicial precedents, academic commentary and international best practices. Findings suggest that while India’s corporate law framework criminalises fraud and mandates financial transparency, it still lacks a lot in terms of enforcement.