NEW DELHI: Singling out the $1.6-billion Satyam-Maytas ‘aborted’ deal as a case in point, Vice-President M. Hamid Ansari on Saturday pulled up industry for the apparent wide disconnect between the mandated profession and actual practice of corporate governance.
Addressing the gathering after presenting the ICSI national awards for excellence in corporate governance here, Mr. Ansari highlighted recent specific instances at home and abroad to drive home the point that the current “economic and financial crises of monstrous dimensions” was on account of “a failure of corporate governance and abdication of key responsibilities by the boards and managements of the companies and even by the rating agencies and regulators.”
Mr. Ansari pointed out that while the failure of large investment banks in developed countries continued to convulse the globe, this week the world woke up to a $50-billion Ponzi scheme operated by a Wall Street trader that has claimed numerous and prominent institutional and individual victims. “The fact that such a fraud could be perpetrated on a gigantic scale involving sophisticated financial institutions and escaping regulator scrutiny speaks volumes of the state of global corporate governance,” he said.
At home, things were no better and it would appear that globalisation also extended to the “darker niches” of our economy, polity and society.
“Two days back the nation heard of a textbook case study of corporate governance failure by the promoters and the management of a top IT company that took a decision with huge financial implications that directly benefits the promoter family with no consultation with other shareholders.”
The Vice-President felt that investor activism in this case bore fruit because it was a high profile company.
Earlier, the Vice-President presented the ‘ICSI Life Time Achievement Award’ to Delhi Metro Chairman and Managing Director E. Sreedharan, and ‘Wining Company Awards’ to Mindtree and Mahindra & Mahindra.