ABSTRACT

This paper provides a detailed understanding behind the motives of people committing
crimes. Researchers have named ―the people committing crime, where the crimes were
minimal and confined to a particular area of administration as “Grass Eaters”. People
involved in financial crime and which has spread in almost all fields of business are termed as
“Meat Eaters”. With the advent of technology and growth of education, financial crime are on
the rise, being protected by professionals finding loopholes in the judiciary and support from
the government indirectly.This paper also includes downturns of SAHARA
INDIA,KINGFISHER and 2g spectrum .

Financial crime is crime committed against property, involving the unlawful conversion of
the ownership of property to one's own personal use and benefit. Financial crimes may
involve fraud like cheque fraud, credit card fraud, mortgage fraud, medical fraud, corporate
fraud, securities fraud, bank fraud, insurance fraud, market manipulation fraud, health care
fraud, theft, scams or confidence tricks,tax evasion, bribery, embezzlement ,identity
theft,money laundering, and forgery and counterfeiting.

This has created a nexus where people from almost all walks of life have started forming
group to do financial crime and being protected by professionals in law. This has lead
to a situation where the small timers have become white collar criminals. Corruption, one of
the species of financial crime, has been the most talked about issue in all spheres-social,
economic and political, not much stringent steps/actions have been taken to curb this menace.
Therefore the concern of this paper is to define white collar crime, study its historical
development and formulate tentative solutions for eradicating the problem.

KEY WORD:

INTRODUCTION:

Criminology is the scientific study of the nature, extent, causes, and control of criminal
behavior in both the individual and society. Criminologists believe that, crime is an act that
violates the basic values and beliefs of society. Those values and beliefs are manifested as
laws that society agrees. Crimes are classified as organized crime, white-collar crime, blue-
collar crime, corporate crime, political crime, public order crime, state crime and state-
corporate crime. From among these, within the field of criminology, white-collar crime has
been defined by Edwin Sutherland as "a crime committed by a person of respectability and
high social status in the course of his occupation". He asserted that crime is social in origin
and a normal response to prevailing cultural conditions. Some of crimes like tax evasion,
smuggling, hoarding and black-marketing, drug-trafficking, bribery, and unauthorized
commission are d' accord with the definition by Sutherland as committed in the course of
occupational activities. Anyway, Money Laundering (ML) is the cleanser of all economic
crimes and the means of salvation to economic criminals. ML is the process by which one
conceals or disguises the true nature, source, disposition, movement or ownership of money
for whatever reason. ML facilitates crime and corruption within developing economies,
which is antithetical to sustainable economic growth.

The formal financial institutions, equity markets, and non-banking financial institutions
(NBFIs), such as insurance companies, are a favoured means of laundering illicit funds both
internationally and within developing countries. There have been crooks and unethical
persons in business, various other professions, who tend to become unscrupulous because of
no reason apart from the thirst of gaining more and more for themselves. These deviants have
least regard for ethical and moral human values. Therefore, International Journal of Social
Science & Interdisciplinary Research Vol.1 Issue 9, September 2012, ISSN.

This study is an attempt to bring to light some of the uncovered research areas in the selected
field.

White collar crimes are financially motivated crimes committed by

individuals, businesses, and government entities. The actual term “white
collar crime” was coined by Edwin Sutherland, Professor of Sociology, 29th
President American Sociological Society. Sutherland described such crimes
as “a crime committed by a person of respectability and high social status
in the course of his occupation.”
White collar crimes cover a wide range of activities, but generally, the
crimes are committed by people who are involved in otherwise lawful
businesses. The perpetrators often hold respectable positions in their
communities or businesses, until their illegal activities discovered. The laws
concerning white collar crimes vary, depending on the exact nature of the
Abstract: Customers today are more concerned
about experiencing high quality services while
investing. The expectation is not just receiving an
investment or financing offer from the financial
institutions in form of a commodity. They rather
expect the institution to have a personality of its
own with wider recognition and provide the
expected return on the financial instruments, which
delivers services in an atmosphere with
satisfaction. In the financial sector the quality of
service is turning out as an important differentiator
among the rivals.
This case is about Sahara group which did a fraud
with their investors. Company failed to comply with
a Supreme Court order in 2012 to repay investors
in the bond scheme, which the court has said was
illegal. With this regard Delhi police arrest Sahara
group owner Subrata Roy in march 2014 and to
appear in court over failure of two Sahara
companies to pay Rs 19,000 crore by way of dues
to be paid to investors.
Keywords: Banking industry, Customer
satisfaction, Financial fraud, Sahara Group.
1. Introduction
Sahara India Pariwar (founded in 1978) is an
Indian conglomerate headquartered in Lucknow,
India with business interests in finance,
infrastructure & housing, media & entertainment,
consumer merchandise retail venture,
manufacturing and information technology. The
company had an estimated market capitalization of
US$25.94 billion as of March 2011.
1.1 Sahara Fraud Case
HOW IT ALL BEGUN: January 4, 2010- Roshan
Lal, a resident of Indore sent a note to the national
housing bank, requesting it to look into housing
bonds issued by two companies of the lucknowheadquartered
Sahara group, Sahara India real
estate corporation and Sahara housing investment
corporation.
Being a CA, Lal wrote in the note, he found that
the bonds, bought by a large number of investors,
were not issued according to the rules. The national
housing bank did not have the wherewithal to
investigate the allegation, So it forwarded the letter
to the SEBI, The capital market regulator.
1. November 2010 - Securities and Exchange
Board of India bars Sahara India Pariwar chief
Subrata Roy and two of its companies - Sahara
India Real Estate Corp (SIREC) and Sahara
Housing Investment Corp (SHIC) from raising
money from the public as they raised several
thousand crores through optionally fully
convertible debentures which SEBI deemed
illegal. December 2010 - Sahara made appeal
in the Allahabad High court which ordered
SEBI not to take any action until a court order
is passed. January 2011 - Delhi High court
issued a warrant against Sahara India Pariwar
chairman Subrata Roy and four other officials
of the group on a complaint that it deceived
investors in a proposed housing project of
Rs.25,000 crore.
2. February 2011 - Delhi High court stays
proceedings against Sahara India Pariwar
chairman Subrata Roy and four other officials
of the group on a complaint that it deceived
investors in a proposed housing project.
October 2011 - Securities Appellate Tribunal
(SAT) ordered two unlisted Sahara Group
companies to refund within six weeks about
17,656.53 crore with 15% interest which it had
raised through a flotation of OFCDs.
3. November 2011 - Sahara India Pariwar moved
to Supreme Court against SAT's order and in
favor of Sahara Group it stayed the SAT order,
and asked the two companies to refund 17,400
crores to their investors and asked the details
& liabilities of the companies. January 2012 -
Supreme Court gives three weeks time to
Sahara India Pariwar to choose between either
to give sufficient bank guarantee or attach
properties worth the amount raised through
OFCD's.
4. June 2012 - SEBI informed Supreme Court
that real estate division of Sahara India
Pariwar had no right to mobilise Rs.27,000
crore from investors through optionally fully
convertible debentures (OFCD) without
complying norms of Market regulator - SEBI.
August 2012 - Supreme Court directs Sahara
Imperial Journal of Interdisciplinary Research (IJIR)
Vol-3, Issue-3, 2017
ISSN: 2454-1362, http://www.onlinejournal.in
Imperial Journal of Interdisciplinary Research (IJIR) Page 1200
India Real Estate Corporation Ltd. (SIRECL)
and the Sahara Housing Investment
Corporation Ltd. (SHICL) to refund over Rs.
24,400 crore.
5. Subrata Roy was eventually arrested on 28
February 2014 by Uttar Pradesh police on a
Supreme Court's warrant, in a dispute with
Market Regulator - SEBI. In a statement after
the arrest, his lawyer said Mr. Roy's 92-yearold
mother was in poor health and needed "her
eldest son" by her side, and hence he failed to
appear at the court. He was granted interim
bail by Supreme Court of India for the same on
26 March 2014 on condition of depositing Rs
10,000 crore with the market regulator Sebi.
As of August 2014, Roy was still in jail and
was trying to sale some of his hotel properties
to enough money.
6. September 5,2014-Sahara chief Subrata Roy
asked SC for 15 more days to sell properties
Appearing before a bench headed by Justice
TS Thakur, Roy's counsel submitted that there
have been huge protests outside the hotels after
an International newspaper published story
that Sultan of Brunei is buying the properties.
October 1,2014- Roy was sent back to his cell
in Tihar at the end of the period granted by the
Supreme Court for stay at the air- conditioned
facility in the complex to negotiate sale of his
overseas hotels. October 06, 2014-Subrata Roy
seeks restoration of special facilities in Tihar
jail .
7. October 31, 2014-Subrata Roy shelled out Rs
31 lakh to use special facilities in jail. Roy was
allowed by the Supreme Court to use the jail's
conference room to negotiate sale of his hotels
in order to collect Rs 10,000 crore for his bail.
8. And since the day of detention Subrata Roy
was in the jail until he got bail on his mother’s
demise in May, 2016.
2. REVIEW OF LITERATURE
According to (Pande, 2014) With a population of
over 1.2 billion, more than 250 million people in
India live in abject poverty. Corruption at the top
and grassroots level is at an all-time high, and GDP
growth has slowed to 4.7 percent in 2014. The
Indian economy relies significantly on the
corporate sector, and the rising number of financial
scams has pertinent ethical implications now more
than ever. The Sahara and Saradha Group scandals
represent the antithesis of all business ethics.
Sahara, for one, has been convicted of wrongfully
acquiring investor money without proper
authorization. Of course, there is the obvious issue
of misrepresenting funding activities to investors as
well as SEBI, but that is simply the tip of the
iceberg. There is widespread speculation that the

40 million investors of the Saharacrimes committed, though many fall under federal
authority.