Corporate Espionage Trends in India

Published on 14 May 2016 by Team

Corporate espionage is nothing but a business scandal which is on the rise in India. Corporate espionage basically refers to stealing trade secrets and confidential information by companies to gain exorbitant profit.  

Cabinet notes, ministries opinions, action planned by RBI, SEBI and even international regulators, banks, income-tax authorities, stock exchanges and even public sector units make their way to the hands of companies through their  lobbyists. They use the information thus gathered for a variety of reasons and like making a quick buck at the stock markets or use it to further their business.

Laws Relating to Corporate Espionage

Law regarding corporate espionage is dealt under Official Trade Secrets Act, 1923. According to this Act, if any person by wrongfully wearing any uniform of a public servant or police office enters into a prohibited place where confidential documents are kept uses, forges or steal such documents for any purpose which prejudicially affects the security of State will be liable under this act for an imprisonment of three years & fine. Companies who engage in spying on competitors is also punishable under Section 3 of Official Secrets Act.

CASES

There have been various cases where big companies have been caught in corporate espionage.

Radia Tape Case

In 2008, the famous Radia tape case, telephonic conversations of  Niira Radia between and top corporates (Ratan Tata and Mukesh Ambani), top politicians (A Raja, Dravida Munnetra Kazhagam supremo Karunanidhi’s daughter Kanimozhi, who was herself an MP), top journalists (Barkha Dutt, Vir Sanghvi, among many others), Atal Bihari Vajpayee’s son-in-law Ranjan Bhattacharya and a host of other movers and shakers., were taped by Income tax department and were leaked which revealed Radia tried to broker deals on behalf of the Tatas in relation to the 2G spectrum sale. The tapes revealed how corporate lobbyists were taking out information from the Indian government based on their contacts with the media and top officials. This led to the loss of US $4.9 billion for the Union government.

Tata telecommunication (2007)

Tata Telecommunications filed a case against its Managing Director’s secretary who was found sharing the board meeting agendas with Tata Telecommunications’ competitor. The entire Call Detail Records (CDRs) are found to be erased from the servers and the equipment used was believed to have been dumped in the Hussainsagar. The gateway equipment (roughly the size of a closet, six feet high and two feet in width) used from within the highly secure premises of Tata Teleservices, was said to have been dumped in the lake by the three suspect employees. Mumbai police were unable to crack the case.

Oil document leakage

An official from Reliance Industries and Jubilant Energy are arrested for hiring employees of Ministry of Petroleum & Gas and paying them money for stealing confidential documents. It is alleged that handsome money of 2.5 lakh was paid by companies.

It is to be noted that corporate espionage is on the rise in India because of lack of innovations and corruption.  Indian companies try to concentrate more on stealing information than innovating new ideas. With the growing level of competition in market and ease of technology, it has become a normal phenomenon and is expected to rise in coming future. As we noted in Telecommunication case the way employees break away all the security system and did their job with ease.  It raises a call for more stringent measures which is needed to be taken by the company to keep a security check on employees and also by the government to keep a check on multi- national companies.

To conclude we must say that the strict vigil should be kept on all visitors. All the official documents should be kept in safe custody and in any case there is any suspicion a meeting should be called and investigation should begin in the case.As stated Competition Act, 2002, there are penalties upto 1 crore. In the same way, higher penalties should be imposed for stealing such confidential information.  Not only government but also company needs to keep a check on employees for that they should monitor activities of an employee on regular basis and keep a background check on them, establish cyber security measures in an organization, segregate information that is confidential etc.

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