Report draws spotlight on corporate governance

by NDTV Profit, January 19, 2010.

One year after the founder of Satyam Computer Services made an astonishing confession to the largest fraud in Indian corporate history, many say that what really sets R. Ramalinga Raju apart is not his malfeasance, but the fact that he got caught.

“To think there aren’t other companies that dabble in less than forthright practices, to believe that other companies are not doing this kind of thing is naive,” said Sharmila Gopinath, research manager at Hong Kong’s Asian Corporate Governance Association.

The group released a 55-page white paper on Indian corporate governance Tuesday, which suggests that many of the conditions that helped facilitate Raju’s $2.5 billion fraud still exist, despite efforts to reform.

The Satyam scandal stunned India and raised questions abroad about the risks of investing in a country where improvements in regulations and corporate governance haven’t kept pace with its rapid rise in economic and financial clout. With creaking infrastructure and a fast-growing population, India more than ever needs reputable markets to attract and channel private investment capital.

The report draws on the views of more than a dozen foreign institutional investors, like the California Public Employees’ Retirement System, auditors, like KPMG, and law firms, like White & Case…(continue reading)

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