The Indian media and entertainment (M&E) industry has witnessed an explosive rise in fraud-related cases over the last two years, according to an EY study.

One of six respondents reported increased cases of fraud in their organisations, the study, the EY M&E Fraud Survey 2014, released today said.

According to 83 per cent of the respondents, kickbacks given for approval of talent-related and acquisition costs, carriage fees, Intellectual Property Rights (IPR), and satellite rights is another challenge faced by the industry.

These hidden costs could have a far-reaching adverse impact on the industry and the economy as a whole, it said in a statement.

The survey features insights of key decision-makers in the Indian M&E space — companies with domestic operations and Indian and global multinational corporations. It also reveals content distribution and TV and film content production, finance and advertisement sales functions, as particularly vulnerable areas.

The survey highlights a high risk of facilitation and unethical payment in segments that mandate Government approval.

“The war against fraud, bribery and corruption risks have leapfrogged and slices across sectors, geographies and economic conditions. Being on an upward trajectory, the Indian M&E sector is increasingly victimised by the growing challenges around governance breakdowns and unethical practices,” said Mukul Shrivastava, Partner, Fraud Investigation & Dispute Services at EY.

“This has led to extensive losses (monetary and reputational), sub-par performance and arrested development. In light of the changing industry dynamics, organisations will have to improve vigilance, boost internal controls and raise compliance benchmarks for sustainable growth,” he added.

EY is into assurance, tax, transaction and advisory services.

>rajesh.kurup@thehindu.co.in

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