No Satyam-like event possible in PSUs: IOC CMD January 27, 2009
Posted by dhirendra1972 in Corporate Governance, Fudging Accounts, Highest Level, Private Sector, Profit Making, Public Sector, Securities and Exchane Board.Tags: Cash, Enterprises, Level, Stock Market, Vigilance
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Good morning friends. However, more PSEs should be listed in the stock market to ensure further tightening of corporate governance. “The Government should make efforts to list as many as possible the stock market to make sure the additional contraction of corporate authority. so that they can have more self-governing directors.
The Satyam episode of fudging accounts and siphoning off cash is not possible in public sector enterprises, which have strong internal checks and balances, Indian Oil CMD and head of a PSU body Sarthak Behuria said in New Delhi.
“No way near it. We have very strong internal audit, then we have statutory auditors… We have the highest level of corporate governance,” Behuria said when asked about the possibility of a Satyam-like event in public sector enterprises (PSEs).
Behuria, who heads the Standing Conference of Public Enterprises (SCOPE) said, the PSEs are subject to strong internal and external vigilance besides following rules of the Securities and Exchange Board of India.
But then, Satyam Computer Services had world-known auditors? “What was the selection process,” he asked.
On the role of independent directors, the SCOPE chairman said their selection process needs to be improved. “Better selection criteria should be there. We should go deeper” for choosing independent directors from a larger pool of talent among consultants and educational institutions like IIMs.
However, more PSEs should be listed in the stock market to ensure further tightening of corporate governance. “The Government should make efforts to list as many PSUs as possible so that they can have more independent directors. Profit making, performing companies should get listed,” Behuria said.
He said there were good examples of good corporate governance not only in PSUs but in the private sector. “There are examples where India can boast of very good governance in companies, both in the private and public sectors,” he said.
Ref: Indian Express
Mellowed FIIs willing to talk to Satyam December 18, 2008
Posted by dhirendra1972 in Confidential Manner, Consensual Manner, Corporate Governance, Fidelity Investments, Growth Expectations, Institutional Investors, IT Business, IT Shares, Shareholder Value, Transparency.Tags: Funds, Investments, Investors, IT, Managers, Shareholders, Shares
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Among frontline IT shares, Satyam has always been accorded a lower valuation compared with its peers. Fund managers are never tired of pointing out that the discount in the price earning multiple reflected corporate governance perception more than growth expectations. And while the controversial Maytas plan has been scrapped, Tuesday’s announcement shows that concerns were justified.
A day later, furious institutional investors appear to have calmed down somewhat. They have moved away from a confrontionist attitude to a ‘let’s meet and talk’ stance.
“Yes, we had thought of initiating legal proceedings, but given that they have called off the plan, we will evaluate our decision,” said a senior official with a private sector insurance firm having a stake in the company.
People familiar with the development told ET that some of the leading investors have decided to meet with the management in order to understand what had driven the management to propose the deal in the first place. “Their ability to do IT business is why we invested in them. Now, what has changed is their intent. We have initiated a meeting with the management and propose to have a dialogue on why shareholders were not consulted,” adds another investor.
Fidelity Investments did not respond to ET’s specific queries. But the fund’s website has this to say on corporate governance issues in companies where they have investments. “Wherever possible, we seek to achieve our objectives in a consensual and confidential manner, but in extremes we will consider requisitioning an extraordinary general meeting (EGM) to enable shareholders as a whole to vote on matters in dispute.”
According to Franklin Templeton Investments India CIO (equity) Sukumar Rajah, the usage of cash reserves to buy unrelated businesses without any transparency doesn’t bode well for governance. “History has shown that companies with higher corporate governance have made more efficient use of capital and created better shareholder value. We believe that the legal framework needs to be strengthened to provide more support to minority shareholders looking to block management decisions that dilute their interest. Our endeavour is to focus on companies with higher quality management standards and in case of any corporate governance lapse, we look to limit the adverse consequences for our investors through various measures,” he told ET.
While many fund managers have reserved their concerns on the active investment in this stock, at least for the time being, their anger and disappointment is clearly evident.
Ref: theeconomictimes
