Securities and Exchange Board of India (Sebi) chairman C B Bhave has asked minority shareholders such as mutual funds to be more active in monitoring the corporate governance practices of companies in which they have investments. He called for country-specific approaches to ensure the implementation of corporate governance rules.
Speaking at the valedictory session of the two-day Asia Round-table on Corporate Governance organised by the Organisation for Economic Cooperation and Development (OECD) here on Tuesday, Bhave said the approaches should be different on the basis of the legal framework, market conditions and the state of development of capital markets in each country. The event was co-hosted by Institute of Company Secretaries of India (ICSI) in partnership with the government of Japan.
Bhave wanted the corporates to look at the auditing process for early warning signals on the corporate governance front.
Briefing the media on the conference proceedings, Grant Kirkpatrick, Head, Corporate Affairs Division, OECD, said the meeting focused on the abuse of related party transactions among other corporate governance issues.
“It is not a problem that is limited to Asia. Abuse of related party transactions is happening in most jurisdictions. And this is happening in spite of sufficient disclosure norms. So we realised that the system was not working and needed to look into the whole system for solutions,” Kirkpatrick said.
Senior policy analyst of OECD, Fianna Jesover, said the meeting attempted to identify ways to implement the “OCED guideline on fighting abusive related party transactions in Asia” in 13 Asian economies.
