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| In
an attempt to crack down on errant companies that have defaulted
on interest on their debenture issues, the Department of Company
Affairs (DCA) has decided to call for information on the total
number of issues and the occurrence of defaults from 39 debenture
trustees, registered with Securities & Exchange Board of India
(SEBI). In a meeting convened to discuss the above and related
matters, strategies to check defaults and ensure regular payment
to investors were discussed. The meeting was attended by representatives
from the ICICI, State Bank of India and the Investor Grievances
Forum (IGF). In a background paper prepared by IGF, it stated
that 472 companies had debenture trustees. |
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A survey of 188 companies from emerging markets of India, Malaysia,
Mexico, South Korea, Taiwan and Turkey gave India 58 points out
of 100, while Malaysia topped the list with 81 points. India was
placed at the bottom of the list of emerging economies, in terms
of transparency. The criteria of transparency were disclosures
and auditing. The report revealed that in emerging markets, institutional
investors rewarded companies that adopted stricter corporate governance
practices. According to the McKinsey Report, by moving from worst
to best, companies could expect, on an average, to experience
roughly a 10 to 12 per cent increase in their market valuation,
a result underscoring the importance investors attach to good
governance.
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The Department of Company Affairs is considering allowing unlisted
companies to issue employee stock options, besides framing guidelines
for allotting sweat equity to their employees. The department
is setting up a high powered committee to examine the two issues
and prescribe norms for issuing sweat equity by unlisted companies.
The committee would also address the issue of outsourcing of personnel
for carrying out inspection of books and accounts. The panel would
look into the valuation aspects of intellectual property rights
as well.
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| London-based World Council for Corporate Governance is organising a conference in New Delhi in September, which will address issues of corporate governance for a sustainable world. A large number of heads of government and heads of states - both from India and abroad are stated to address the conference. Several Indian CEOs and academicians will also be speaking on the occasion. The gathering will debate on topics such as - Corporate governance, a key to sustainable wealth creation, role of ethics, role of non-executive directors, role of audit regulatory bodies, conflict of interest and benchmarking for corporate governance.
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| A joint survey conducted by Asian Centre for Corporate Governance and Mahindra Young Knowledge Foundation has brought out a number of unpleasant facts about independent directors and their role in Indian companies' boards. The following are some of the findings of the study -
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| © 2001 Academy of Corporate Governance |
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