Corporate Governance In India AndSEBI RegulationsPresented By:Atif GhayasAligarh Muslim University, Aligarh
Here comes your footerContents Introduction Definition Key players Principles of Corporate Governance Objectives of Corporate Governance Corporate Governance in India Securities Exchange Board Of India Satyam Scandal Conclusion
Here comes your footerIntroduction The last few years have seen some major scams and corporatecollapse across the globe. In India, the major example is Satyam which is one of the largestIT companies in India. All these events have caused the pendulum of public faith to shiftaway from free market to a more closely regulated one
Here comes your footerDefinition A system of law and soundapproaches by which corporations aredirected and controlled Corporate governance are the policies,procedures and rules governing therelationships between theshareholders, directors and managersin a company, as defined by theapplicable laws, the corporate charter,the company’s bylaws, and formalpolicies
Here comes your footerKey players in CG Management Board of Directors Customers Shareholders Employees Regulators Suppliers
Here comes your footerPrinciples in CG Rights and equitable treatment of shareholders Interests of other stakeholders Role and responsibilities of the board Integrity and ethical behaviour Disclosure and transparency
Here comes your footerObjectives of CG Enhance the performance of companies Enhance access to capital Enhance long term prosperity Provide barrier to corrupt dealings Impacts on the society as a whole
Here comes your footerCG in India The Indian corporate scenario was more or less stagnant till theearly 90s. The position and goals of the Indian corporate sector has changeda lot after the liberalization of 90s. India’s economic reform programme made a steady progress in1994. India with its 20 million shareholders, is one of the largestemerging markets in terms of the market capitalization.
Here comes your footerSecurities Exchange Board Of India On April 12, 1988, SEBI was established with objective ofprotecting the rights of small investors and regulating anddeveloping the stock markets in India. In 1992, the Bombay Stock Exchange (BSE),the leading stockexchange in India, witnessed the first major scam mastermindedby Harshad Mehta.
Here comes your footerSecurities Exchange Board Of India Analysts unanimously felt that if more powers had been given toSEBI, the scam would not have happened. As a result the Government of India brought in a separatelegislation by the name of ‘SEBI Act 1992’and conferred statutorypowers to it. Since then, SEBI had introduced several stock market reforms.These reforms significantly transformed the face of Indian StockMarkets
Here comes your footer Overstated assets and income The results announced on October 17, 2009overstated quarterly Revenues by percent andprofits by 97 percent. The global head of internal audit also illegallyobtained loans for the company. Created 13000 fake salary accounts Created fake customer identities and generatedfake invoices to inflate revenueSatyam Scandal
Here comes your footerSatyam Scandal The CEO was convinced that the gap in the balance sheets reached anunmanageable heights and could not be filled. Satyam Computer crashed by Rs 139.15 or 77.69 per cent to close atRs 39.95, after the Chairman`s confession Bombay stock exchange fell 700 points The Sensex recorded the biggest single-day loss in the past twomonths, after Satyam Computers Services, plunged 80 percent.
Here comes your footerConclusion Corporate governance And economic development areintrinsically linked. Effective corporate governance systems promote thedevelopment of strong financial systems Which, in turn, have an unmistakably positive effect oneconomic growth and poverty reduction.