Sunday, November 27, 2011
Sebi plans platform for minority shareholders - Home - livemint.com
Sebi plans platform for minority shareholders - Home - livemint.com: “The shareholders are dispersed all over the country. They hardly communicate with each other. Even if they attend meetings, they do not have a unified voice,” said the second person. “So, the management and controlling shareholders are hardly under pressure to reverse their decisions.” The population of non-controlling shareholders is large and their votes could act as the most efficient tool to improve corporate governance, he added.
Sebi plans platform for minority shareholders - Home - livemint.com
Sebi plans platform for minority shareholders - Home - livemint.com: “The shareholders are dispersed all over the country. They hardly communicate with each other. Even if they attend meetings, they do not have a unified voice,” said the second person. “So, the management and controlling shareholders are hardly under pressure to reverse their decisions.” The population of non-controlling shareholders is large and their votes could act as the most efficient tool to improve corporate governance, he added.
3 cheers for corporate governance
| 3 cheers for corporate governance |
| Asish K Bhattacharyya / November 28, 2011, 0:33 IST Business Standard |
3 cheers for corporate governance: Exit of Mr Akula from SKS Micro finance Limited, the only listed micro finance company, provides some lessons in corporate governance. The first is that holding of majority voting rights by institutions does not necessarily improve corporate governance. The company’s shareholding pattern as at September 2011 was: Promoters: 37%, FII 19%, Indian Financial Institutions: 6%, Indian Bodies Corporate: 14%, Foreign Bodies Corporate: 12 % and others: 12%. Effective corporate governance requires institutions to play their role effectively. That has not happened in the case of SKS. Second is that the corporate governance system comes under stress when a company deviates from its stated vision and mission. The web site of the company articulates the mission as:
Thursday, November 10, 2011
With settlement with its agitating workers corporate governance is questioned at Maruti Suzuki
Shyamal Majumdar: In letter, but not in spirit: Shyamal Majumdar: In letter, but not in spirit
Maruti would do well to make adequate disclosures about its private deal with a few union leaders
Shyamal Majumdar / Mumbai�November 11, 2011, 0:34 IST
It took just about a week for Sonu Gujjar to convert his carefully cultivated image of a new-age workers’ hero to that of a traitor — an adjective being used quite liberally these days by his followers who had once trusted him implicitly. In many ways, this is a familiar script — there have been not-so-publicised instances in the past in which the so-called union leaders have led a troop of disgruntled workers to stop production only to slyly broker a side-deal with the management.
Gujjar has since denied receiving Rs 40 lakh from Maruti Suzuki, as the media had reported, and told this newspaper in an interview that he and 29 other suspended employees got Rs 16 lakh each, which included dearness allowance, provident fund and the salary due if they had worked till they were 52 years of age.
Maruti would do well to make adequate disclosures about its private deal with a few union leaders
Shyamal Majumdar / Mumbai�November 11, 2011, 0:34 IST
It took just about a week for Sonu Gujjar to convert his carefully cultivated image of a new-age workers’ hero to that of a traitor — an adjective being used quite liberally these days by his followers who had once trusted him implicitly. In many ways, this is a familiar script — there have been not-so-publicised instances in the past in which the so-called union leaders have led a troop of disgruntled workers to stop production only to slyly broker a side-deal with the management.
Gujjar has since denied receiving Rs 40 lakh from Maruti Suzuki, as the media had reported, and told this newspaper in an interview that he and 29 other suspended employees got Rs 16 lakh each, which included dearness allowance, provident fund and the salary due if they had worked till they were 52 years of age.
Sunday, October 16, 2011
Shareholder activism grows from baby steps
Shareholder activism grows from baby steps: Shareholder activism grows from baby steps
N Sundaresha Subramanian, Arijit Barman & Joydeep Ghosh / Mumbai�October 17, 2011, 1:26 IST
It may not be a war cry yet, but the voice is definitely getting shriller. On Friday, worried investors of Maruti Suzuki took the extraordinary step of bypassing the management and spoke directly to the representative of the workers’union. The company is going through a crippling strike, which has taken the stock price to a 52-week low.
N Sundaresha Subramanian, Arijit Barman & Joydeep Ghosh / Mumbai�October 17, 2011, 1:26 IST
It may not be a war cry yet, but the voice is definitely getting shriller. On Friday, worried investors of Maruti Suzuki took the extraordinary step of bypassing the management and spoke directly to the representative of the workers’union. The company is going through a crippling strike, which has taken the stock price to a 52-week low.
Sunday, October 9, 2011
Wednesday, September 28, 2011
Nominees still appointed as independent directors
| Nominees still appointed as independent directors |
| Mehul Shah / Mumbai September 29, 2011, 0:27 IST |
Some well-known Indian firms continue to classify nominees of institutional shareholders as independent directors on their board -- a practice opposed by the Institute of Company Secretaries of India (ICSI).
At present, Clause 49 of the Listing Agreement allows firms to classify nominee directors as independent directors. However, the new Companies Bill, is likely to be tabled in the coming (winter) session of Parliament, has proposed to disallow this practice, considered unfair to small shareholders. In the final draft of the new Bill, an independent director in relation to a company means a non-executive director of the company other than a nominee director.
Monday, August 15, 2011
A ranking of listed companies' investor relations practices - The Economic Times
A ranking of listed companies' investor relations practices - The Economic Times: "NEW DELHI: At a time when there is increased focus on corporate governance, a new ranking system developed by a private entity will benchmark the investor relations practices of Indian companies against their global peers.
IR Global Rankings (IRGR) would carry out indexing of companies listed on the Bombay Stock Exchange and the National Stock Exchange.
IRGR's system focuses on investor relations practices that include corporate governance practices and financial disclosure procedures.
'We are honoured and excited to have India as a single region and to be conducting its ranking,' IR Global Rankings Head Luar Huber in a statement.
Many Indian corporates, including the likes of Infosys Technologies, Aditya Birla Nuvo, Sun Pharmaceutical and Tata Consultancy, have already registered themselves for the rankings."
IR Global Rankings (IRGR) would carry out indexing of companies listed on the Bombay Stock Exchange and the National Stock Exchange.
IRGR's system focuses on investor relations practices that include corporate governance practices and financial disclosure procedures.
'We are honoured and excited to have India as a single region and to be conducting its ranking,' IR Global Rankings Head Luar Huber in a statement.
Many Indian corporates, including the likes of Infosys Technologies, Aditya Birla Nuvo, Sun Pharmaceutical and Tata Consultancy, have already registered themselves for the rankings."
Friday, August 12, 2011
Centre may allow small shareholders to choose director
Centre may allow small shareholders to choose director: "Centre may allow small shareholders to choose director
To pave the way for small groups of shareholders to nominate a director on the board of listed companies, the Ministry of Corporate Affairs (MCA) is set to bring in more clarity to a provision in the Companies Act 1956. A senior government official said the provision was dropped in the Companies Bill 2009 but may find place in the revised Bill. Other emerging economies, including China and Brazil, already have a set procedure in place to empower small shareholders.
Ministry of corporate affairs is expected to specify the procedure to be followed by small shareholders to elect their nominee in the revised Companies Bill 2011. The Act of 1956 allowed a group of 1,000 or more small shareholders to appoint their nominee on the company board, but it lacked clarity."
To pave the way for small groups of shareholders to nominate a director on the board of listed companies, the Ministry of Corporate Affairs (MCA) is set to bring in more clarity to a provision in the Companies Act 1956. A senior government official said the provision was dropped in the Companies Bill 2009 but may find place in the revised Bill. Other emerging economies, including China and Brazil, already have a set procedure in place to empower small shareholders.
Ministry of corporate affairs is expected to specify the procedure to be followed by small shareholders to elect their nominee in the revised Companies Bill 2011. The Act of 1956 allowed a group of 1,000 or more small shareholders to appoint their nominee on the company board, but it lacked clarity."
Sunday, August 7, 2011
Pratip Kar: The global market turmoil & Clause 49
Pratip Kar: The global market turmoil & Clause 49: Clause 49 may have become dated. It was incorporated as a new Clause in the Listing Agreement in 2000, subsequently amended in 2004, implemented in 2006 and there was a small amendment in 2008. But the corporate governance landscape, both in India and globally, has changed and is still evolving. There was the global financial crisis in 2008 and, recently, scandals involving some US companies and personalities. In India, we had the accounting scandal at Satyam Computers. The scandal involving Rupert Murdoch and News Corporation is causing endless worries to the Financial Reporting Council in the UK. These have given rise to serious governance issues straddling roles of the boards, independent directors, risk management, executive compensation and ethical and value-based management. Whether the present Clause 49 adequately addresses these issues needs to be examined."
Saturday, July 16, 2011
National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business (ESG Guidelines)
http://www.mca.gov.in/Ministry/latestnews/National_Voluntary_Guidelines_2011_12jul2011.pdf
Introduction to guidelines
The Guidelines presented herein are a refinement over the Corporate Social
Responsibility Voluntary Guidelines 2009, released by the Ministry of Corporate
Affairs in December 2009. Significant inputs, received from diverse stakeholder
groups across the country have been duly considered, and based on these inputs;
appropriate changes have been made in the original draft Guidelines produced by the
Guidelines Drafting Committee. This document therefore represents the consolidated
perspective of vital stakeholders in India, and accordingly lays down the basic
requirements for businesses to function responsibly, thereby ensuring a wholesome
and inclusive process of economic growth.
Mandate and process: These Guidelines have been developed through an extensive
consultative process by a Guidelines Drafting Committee (GDC) comprising
competent and experienced professionals representing different stakeholder groups.
The GDC was appointed by the Indian Institute of Corporate Affairs (IICA) with a
clear brief that the Guidelines must provide a distinctively 'Indian' approach, which
will enable businesses to balance and work through the many unique requirements
of our land. The process that was followed in developing these Guidelines relied
heavily upon developing a consensus on various ideas that emerged from various
stakeholder groups. Leading trade and industry chambers, who were represented in
the GDC as well as actively engaged in the consultative process, have been key
partners in the development of this consensus.
Applicability: The Guidelines are designed to be used by all businesses
irrespective of size, sector or location and therefore touch on the fundamental
aspects – the 'spirit' - of an enterprise. It is expected that all businesses in India,
including multi-national companies that operate in the country, would consciously
work towards following the Guidelines. The Guidelines also provide a framework
for responsible business action for Indian MNCs planning to invest or already
operating in other parts of the world. Businesses are encouraged to move beyond
the recommended minimum provisions articulated in the document.
For business leaders and managers entrusted with the task of deploying the
principles of Responsible Business, it is worthwhile to understand that business
boundaries today extend well beyond the traditional walls of a factory or an
operating plant and all the way across the value chain. Businesses are therefore
encouraged to ensure that not only do they follow the Guidelines for areas directly
within their immediate control or within their sphere of influence, but that they
encourage and support their vendors, distributors, partners and other collaborators
across their value chains to follow the Guidelines as well.
The Guidelines are applicable to all such entities, and are intended to be adopted
by them comprehensively, as they raise the bar in a manner that makes their valuecreating operations sustainable. It needs to be emphasized that all Principles are
equally important and non-divisible – this implies that if a business endeavours to
function responsibly, it would have to adopt each of the nine (9) principles in their
entirety rather than picking and choosing what might suit them.
Introduction to guidelines
The Guidelines presented herein are a refinement over the Corporate Social
Responsibility Voluntary Guidelines 2009, released by the Ministry of Corporate
Affairs in December 2009. Significant inputs, received from diverse stakeholder
groups across the country have been duly considered, and based on these inputs;
appropriate changes have been made in the original draft Guidelines produced by the
Guidelines Drafting Committee. This document therefore represents the consolidated
perspective of vital stakeholders in India, and accordingly lays down the basic
requirements for businesses to function responsibly, thereby ensuring a wholesome
and inclusive process of economic growth.
Mandate and process: These Guidelines have been developed through an extensive
consultative process by a Guidelines Drafting Committee (GDC) comprising
competent and experienced professionals representing different stakeholder groups.
The GDC was appointed by the Indian Institute of Corporate Affairs (IICA) with a
clear brief that the Guidelines must provide a distinctively 'Indian' approach, which
will enable businesses to balance and work through the many unique requirements
of our land. The process that was followed in developing these Guidelines relied
heavily upon developing a consensus on various ideas that emerged from various
stakeholder groups. Leading trade and industry chambers, who were represented in
the GDC as well as actively engaged in the consultative process, have been key
partners in the development of this consensus.
Applicability: The Guidelines are designed to be used by all businesses
irrespective of size, sector or location and therefore touch on the fundamental
aspects – the 'spirit' - of an enterprise. It is expected that all businesses in India,
including multi-national companies that operate in the country, would consciously
work towards following the Guidelines. The Guidelines also provide a framework
for responsible business action for Indian MNCs planning to invest or already
operating in other parts of the world. Businesses are encouraged to move beyond
the recommended minimum provisions articulated in the document.
For business leaders and managers entrusted with the task of deploying the
principles of Responsible Business, it is worthwhile to understand that business
boundaries today extend well beyond the traditional walls of a factory or an
operating plant and all the way across the value chain. Businesses are therefore
encouraged to ensure that not only do they follow the Guidelines for areas directly
within their immediate control or within their sphere of influence, but that they
encourage and support their vendors, distributors, partners and other collaborators
across their value chains to follow the Guidelines as well.
The Guidelines are applicable to all such entities, and are intended to be adopted
by them comprehensively, as they raise the bar in a manner that makes their valuecreating operations sustainable. It needs to be emphasized that all Principles are
equally important and non-divisible – this implies that if a business endeavours to
function responsibly, it would have to adopt each of the nine (9) principles in their
entirety rather than picking and choosing what might suit them.
CORPORATE SOCIAL RESPONSIBILITY VOLUNTARY GUIDELINES 2009
http://www.mca.gov.in/Ministry/latestnews/CSR_Voluntary_Guidelines_24dec2009.pdf
Fundamental Principle
Core Elements:
Each business entity should formulate a CSR policy to guide its
strategic planning and provide a roadmap for its CSR initiatives, which
should be an integral part of overall business policy and aligned with its
business goals. The policy should be framed with the participation of
various level executives and should be approved by the Board.
The CSR Policy should normally cover following core elements:
1. Care for all Stakeholders:
The companies should respect the interests of, and be responsive
towards all stakeholders, including shareholders, employees,
customers, suppliers, project affected people, society at large etc. and
create value for all of them. They should develop mechanism to actively
engage with all stakeholders, inform them of inherent risks and mitigate
them where they occur.
2. Ethical functioning:
Their governance systems should be underpinned by Ethics,
Transparency and Accountability. They should not engage in business
practices that are abusive, unfair, corrupt or anti-competitive.
GUIDELINES
Ministry of Corporate Affairs3. Respect for Workers' Rights and Welfare:
Companies should provide a workplace environment that is safe,
hygienic and humane and which upholds the dignity of employees.
They should provide all employees with access to training and
development of necessary skills for career advancement, on an equal
and non-discriminatory basis. They should uphold the freedom of
association and the effective recognition of the right to collective
bargaining of labour, have an effective grievance redressal system,
should not employ child or forced labour and provide and maintain
equality of opportunities without any discrimination on any grounds in
recruitment and during employment.
4. Respect for Human Rights:
Companies should respect human rights for all and avoid complicity
with human rights abuses by them or by third party.
5. Respect for Environment:
Companies should take measures to check and prevent pollution;
recycle, manage and reduce waste, should manage natural resources
in a sustainable manner and ensure optimal use of resources like land
and water, should proactively respond to the challenges of climate
change by adopting cleaner production methods, promoting efficient
use of energy and environment friendly technologies.
6. Activities for Social and Inclusive Development:
Depending upon their core competency and business interest,
companies should undertake activities for economic and social
development of communities and geographical areas, particularly in the
vicinity of their operations. These could include: education, skill building
for livelihood of people, health, cultural and social welfare etc.,
particularly targeting at disadvantaged sections of society.
Implementation Guidance:
1. The CSR policy of the business entity should provide for an
implementation strategy which should include identification of
projects/activities, setting measurable physical targets with timeframe,
organizational mechanism and responsibilities, time schedules and
monitoring. Companies may partner with local authorities, business
associations and civil society/non-government organizations. They
may influence the supply chain for CSR initiative and motivate
employees for voluntary effort for social development. They may evolve
a system of need assessment and impact assessment while
undertaking CSR activities in a particular area. Independent evaluation
may also be undertaken for selected projects/activities from time to
time.
2. Companies should allocate specific amount in their budgets for CSR
activities. This amount may be related to profits after tax, cost of
planned CSR activities or any other suitable parameter.
3. To share experiences and network with other organizations the
company should engage with well established and recognized
programmes/platforms which encourage responsible business
practices and CSR activities. This would help companies to improve on
their CSR strategies and effectively project the image of being socially
responsible.
4. The companies should disseminate information on CSR policy,
activities and progress in a structured manner to all their stakeholders
and the public at large through their website, annual reports, and other
communication media.
Fundamental Principle
Core Elements:
Each business entity should formulate a CSR policy to guide its
strategic planning and provide a roadmap for its CSR initiatives, which
should be an integral part of overall business policy and aligned with its
business goals. The policy should be framed with the participation of
various level executives and should be approved by the Board.
The CSR Policy should normally cover following core elements:
1. Care for all Stakeholders:
The companies should respect the interests of, and be responsive
towards all stakeholders, including shareholders, employees,
customers, suppliers, project affected people, society at large etc. and
create value for all of them. They should develop mechanism to actively
engage with all stakeholders, inform them of inherent risks and mitigate
them where they occur.
2. Ethical functioning:
Their governance systems should be underpinned by Ethics,
Transparency and Accountability. They should not engage in business
practices that are abusive, unfair, corrupt or anti-competitive.
GUIDELINES
Ministry of Corporate Affairs3. Respect for Workers' Rights and Welfare:
Companies should provide a workplace environment that is safe,
hygienic and humane and which upholds the dignity of employees.
They should provide all employees with access to training and
development of necessary skills for career advancement, on an equal
and non-discriminatory basis. They should uphold the freedom of
association and the effective recognition of the right to collective
bargaining of labour, have an effective grievance redressal system,
should not employ child or forced labour and provide and maintain
equality of opportunities without any discrimination on any grounds in
recruitment and during employment.
4. Respect for Human Rights:
Companies should respect human rights for all and avoid complicity
with human rights abuses by them or by third party.
5. Respect for Environment:
Companies should take measures to check and prevent pollution;
recycle, manage and reduce waste, should manage natural resources
in a sustainable manner and ensure optimal use of resources like land
and water, should proactively respond to the challenges of climate
change by adopting cleaner production methods, promoting efficient
use of energy and environment friendly technologies.
6. Activities for Social and Inclusive Development:
Depending upon their core competency and business interest,
companies should undertake activities for economic and social
development of communities and geographical areas, particularly in the
vicinity of their operations. These could include: education, skill building
for livelihood of people, health, cultural and social welfare etc.,
particularly targeting at disadvantaged sections of society.
Implementation Guidance:
1. The CSR policy of the business entity should provide for an
implementation strategy which should include identification of
projects/activities, setting measurable physical targets with timeframe,
organizational mechanism and responsibilities, time schedules and
monitoring. Companies may partner with local authorities, business
associations and civil society/non-government organizations. They
may influence the supply chain for CSR initiative and motivate
employees for voluntary effort for social development. They may evolve
a system of need assessment and impact assessment while
undertaking CSR activities in a particular area. Independent evaluation
may also be undertaken for selected projects/activities from time to
time.
2. Companies should allocate specific amount in their budgets for CSR
activities. This amount may be related to profits after tax, cost of
planned CSR activities or any other suitable parameter.
3. To share experiences and network with other organizations the
company should engage with well established and recognized
programmes/platforms which encourage responsible business
practices and CSR activities. This would help companies to improve on
their CSR strategies and effectively project the image of being socially
responsible.
4. The companies should disseminate information on CSR policy,
activities and progress in a structured manner to all their stakeholders
and the public at large through their website, annual reports, and other
communication media.
Wednesday, July 6, 2011
Why Corporate Governance is So Important to China - Eric Jackson - Tech and China - Forbes
Why Corporate Governance is So Important to China - Eric Jackson - Tech and China - Forbes: "Corporate governance has to do with how organizations are run.� Organizations with proper corporate governance have accountability and transparency.� People in authority at those organizations know that their actions will be seen and judged by others.� Therefore, those leaders are more likely to act in ways that benefit the organization’s stakeholders.� They are also less inclined to act in ways that benefit themselves personally at the expense of the organization.
China has always been a country that celebrates hard work and success in business.� To succeed in China, the winning companies face enormous competition domestically to get to the top and stay there.� They are generally not able to be incompetent or corrupt and succeed in the long-term.
But there is a growing crisis in China involving bad corporate governance that needs to be addressed immediately in order to prevent a major economic crisis in the future."
China has always been a country that celebrates hard work and success in business.� To succeed in China, the winning companies face enormous competition domestically to get to the top and stay there.� They are generally not able to be incompetent or corrupt and succeed in the long-term.
But there is a growing crisis in China involving bad corporate governance that needs to be addressed immediately in order to prevent a major economic crisis in the future."
Monday, July 4, 2011
Compact Disc investors disappointed over delisting plan; bank serves recovery notice - Moneylife Personal Finance site and magazine
Compact Disc investors disappointed over delisting plan; bank serves recovery notice - Moneylife Personal Finance site and magazine: "Compact Disc India (CDI) has left its retail investors fuming over its delisting plans. The shareholders are questioning the company's motives, as it has not paid the dividends it announced over the past two years, but it now seems to have the funds to buy back shares.
Interestingly, the company has been restrained from initiating any process of delisting of shares by the Debts Recovery Tribunal-II, Delhi, after its banker, HSBC, filed a suit for recovery. This is again strange, that the company does not have funds to pay its banker, but apparently has money to undertake a share buyback.
The stock reacted negatively to these developments, losing 16% since 6th June till the close of trading on Friday."
Interestingly, the company has been restrained from initiating any process of delisting of shares by the Debts Recovery Tribunal-II, Delhi, after its banker, HSBC, filed a suit for recovery. This is again strange, that the company does not have funds to pay its banker, but apparently has money to undertake a share buyback.
The stock reacted negatively to these developments, losing 16% since 6th June till the close of trading on Friday."
Suspended animation of scrips: Investors suffer and errant companies are let off the hook - Moneylife Personal Finance site and magazine
Suspended animation of scrips: Investors suffer and errant companies are let off the hook - Moneylife Personal Finance site and magazine: "After Moneylife wrote earlier about some 1,500 scrips being in suspended animation, even as the Securities and Exchange Board of India (SEBI) is set to tweak the takeover and delisting rules, intermediaries and investors are writing to protest the lack of action.
Suspension of scrips, or delisting them, punishes investors and helps companies who want to ditch their retail shareholders after raising funds from them. Companies merely need to violate the listing rules by refusing to pay the fees or making correct disclosures. Meanwhile, investors are stuck. They continue to pay the annual depository charges and cannot even close the DP account without transferring the shares; re-materialising them involves a further cost on what could be a worthless share."
Suspension of scrips, or delisting them, punishes investors and helps companies who want to ditch their retail shareholders after raising funds from them. Companies merely need to violate the listing rules by refusing to pay the fees or making correct disclosures. Meanwhile, investors are stuck. They continue to pay the annual depository charges and cannot even close the DP account without transferring the shares; re-materialising them involves a further cost on what could be a worthless share."
BSE finds Compact Disc India non- compliant with SEBI Listing Agreement - Moneylife Personal Finance site and magazine
BSE finds Compact Disc India non- compliant with SEBI Listing Agreement - Moneylife Personal Finance site and magazine: "It is reliably learnt that the Bombay Stock Exchange (BSE) has found multimedia and animation company Compact Disc India non-compliant with several provisions of Clause 49 of the SEBI Listing Agreement. It has sought clarification and explanation from the company on this matter.
Apparently, the stock exchange has observed that the company has only a single independent director out of a total of three directors and is thus non-compliant with the requirements under Clause 49 (i) (a) of the Listing Agreement. As per the guidelines, at least 50% of the company’s board should be independent directors.
Further, the company has also failed to constitute its audit committee under clause 49(ii) (a) as per which two-thirds of the members should be independent directors."
Apparently, the stock exchange has observed that the company has only a single independent director out of a total of three directors and is thus non-compliant with the requirements under Clause 49 (i) (a) of the Listing Agreement. As per the guidelines, at least 50% of the company’s board should be independent directors.
Further, the company has also failed to constitute its audit committee under clause 49(ii) (a) as per which two-thirds of the members should be independent directors."
Wednesday, June 29, 2011
Amar Bheenick: FICCI Grant Thornton Corporate Governance Review 2...
Amar Bheenick: FICCI Grant Thornton Corporate Governance Review 2...: "Corporate governance and its implementation in India is not only being seen as an aftermath to recent corporate frauds, but also as a conseq..."
Friday, June 10, 2011
Corporate Governance and Reform - The Impact of the Dodd-Frank Act - The Latest Legal Features, Research and Legal Profiles - Who's Who Legal
Corporate Governance and Reform - The Impact of the Dodd-Frank Act - The Latest Legal Features, Research and Legal Profiles - Who's Who Legal: "The Act sets new standards relating to executive compensation and corporate governance. In some cases, the reach of the Act is limited to companies that have listed their securities on a national securities exchange, such as the NYSE or the NASDAQ Stock Market, but in other cases it extends to companies that are otherwise subject to specified SEC reporting requirements, such as the requirement to deliver to shareholders a proxy or information statement. The Act also authorises the SEC to exempt companies from certain requirements, in particular with respect to compensation committee independence, compensation-related shareholder voting and shareholder proxy access, based on the size of the issuer and other relevant factors."
Thursday, June 2, 2011
Sunday, March 13, 2011
SEBI, barred 3 Independent Directors of Pyramid Saimira Theatre Ltd. (PSTL)
SEBI, barred 3 Independent Directors of Pyramid Saimira Theatre Ltd. (PSTL) from being an independent director or a member of audit committee of any listed company for a period of two years from March 11, 2011, for approving inflated profits of the company as member of audit committee.
SEBI order states that Pyramid Saimira Theatre Ltd. (PSTL) inflated its profits and revenues by fictitious entries in its accounts,disclosed the same in quarterly and annual results for the financial year 2007-08 and thereby misled the public in their investment decisions.
Mr. K. S. Kasiraman, Mr. K.Natarahjan and Mr. G. Ramakrishnan, who were independent directors of PSTL and members of its audit committee at the relevant time, have failed in their duty of care as an independent director and also they have failed to review, as members of the audit committee, the internal control systems, which generated misleading financial statements. All these facilitated the company to make false and misleading disclosures and thereby created artificial prices and volumes in the securities of PSTL in the market, to the detriment of innocent investors.
Sunday, February 27, 2011
T N Ninan: Off-balance sheet
T N Ninan: Off-balance sheet: "The Enron scandal in the US was facilitated by off-balance sheet items — transactions and entities that were not disclosed to shareholders. The build-up to the US financial collapse of 2008 also saw banks taking large transactions and risks off the publicly reported books, and tucking them away in unreported corners where regulators and shareholders could not get a peep. Many similar scams have been possible only because companies created entities and accounts that were used to indulge in unreported transactions, and to create hidden assets and liabilities. The question is whether the same thing has been happening in India."
Tuesday, February 8, 2011
SEBI to disallow interested shareholders in voting on special resolution on related party transaction
To protect small and diversified shareholders in listed companies from abusive related party transactions, SEBI to recommend Ministry of Corporate Affairs to disallow interested shareholders from voting on the special resolution of the prescribed related party transaction.
This view was taken based on the learning from the investigation in the matter of Satyam Computer Services Limited.
Tuesday, February 1, 2011
It's time for Indian companies to act more ethically | Nishika Patel | Global development | guardian.co.uk
It's time for Indian companies to act more ethically | Nishika Patel | Global development | guardian.co.uk: "The global economic fallout and mounting concern with sustainable growth and climate change has spawned a new breed of ethical investors. They are urging companies to report on the environmental and social costs of their operations and improve corporate governance. 'One of the root causes of the global economic crisis was a lack of transparency, investor greed and poor corporate governance … How companies report, how they tell us about the risk in their company both financial and non-financial is the solution,' said Jane Diplock, chairwoman of the International Organisation of Securities Commissions, speaking at the Responsible Investment conference in Mumbai in January."
Saturday, January 8, 2011
Indian corporate needs Public Company Accounting Oversight Board
In United States to protect the interests of investors, Stock Exchange Commission (SEC) has mandated that all Certified Public Accountants (CPA) should register with Public Company Accounting Oversight Board ( PCAOB) as per Sarbanes-Oxley Act of 2002 (SOX) if they wish to audit of public companies. PCAOB oversee the audit of public companies that are subject to the securities laws, establish audit report standards and rules, investigate, inspect and enforce compliance relating to registered public accounting firms, associated persons, and the obligations and liabilities of accountants.
Securities Exchange Board of India (SEBI) also should follow US Stock Exchange Commission and setup similar board to oversee the audit of public companies in India so that frauds like of Satyam Computers can be minimised
Saturday, January 1, 2011
Corporate Governance Watch 2010
Corporate governance standards have improved over the past decade, but
even the best Asian markets remain far from international best practice.
Regulators make it too easy for companies to get away with box-ticking.
Markets still lack effective rules on fundamentals such as independent
directors and audit committees. Not enough has been invested to make best
practices work. Meanwhile, most institutional investors are yet to invest
sufficiently in voting, engagement or stewardship. Rather than use the global
financial crisis as a platform to push reform forward, governments have taken
a complacent view, happy that the crisis this time did not start in Asia
Phil Armstrong at 10 th ICSI National Award for Excellence in Corporate Governance
Crises such as Satyam compromise India’s promising and enduring economic outlook. Because it
exposes fundamental areas of concern that are important to foreign investors and capital markets.
Issues such as: 3
• the relationship between controlling and minority shareholders particularly in family owned
or controlled companies
• related party transactions and its proper regulation
• quality of financial disclosure
• the role of promoters
• independent oversight of the Indian accounting profession
• limited activism of domestic institutional investors, and
• issues of director independence and board effectiveness.
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