“L’ affaire Satyam”, December 19, was an interesting read. Satyam’s miscalculation raises some serious questions about corporate governance in Indian companies. The angry reaction from shareholders, specifically foreign ones, is timely. The role of the Board and specifically, of independent directors, is very important as they are expected to protect the rights of the minority shareholders.
I agree that it is not proper to paint everyone with the same brush but it has definitely shattered the confidence of shareholders in Indian companies at a time when the economy and financial markets are going through a bad phase.
Another interesting episode that has come to light recently is the NSE’s 26 per cent stake in a technology company, which is distributing brokers’ front-end software. The NSE, being an unlisted company, does not technically need to publish this information, but as a public institution — a stock exchange — it is social infrastructure and has a regulatory role in the capital market. It should, therefore, have disclosed this to the general public.
G C Nath, via email
