1. Corporate Governance In India And
SEBI Regulations
Presented By:
Atif Ghayas
Aligarh Muslim University, Aligarh

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Contents
 Introduction
 Definition
 Key players
 Principles of Corporate Governance
 Objectives of Corporate Governance
 Corporate Governance in India
 Securities Exchange Board Of India
 Satyam Scandal
 Conclusion

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Introduction
 The last few years have seen some major scams and corporate
collapse across the globe.
 In India, the major example is Satyam which is one of the largest
IT companies in India.
 All these events have caused the pendulum of public faith to shift
away from free market to a more closely regulated one

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Definition
 A system of law and sound
approaches by which corporations are
directed and controlled
 Corporate governance are the policies,
procedures and rules governing the
relationships between the
shareholders, directors and managers
in a company, as defined by the
applicable laws, the corporate charter,
the company’s bylaws, and formal
policies

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Key players in CG
 Management
 Board of Directors
 Customers
 Shareholders
 Employees
 Regulators
 Suppliers

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Principles 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

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Objectives 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

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CG in India
 The Indian corporate scenario was more or less stagnant till the
early 90s.
 The position and goals of the Indian corporate sector has changed
a lot after the liberalization of 90s.
 India’s economic reform programme made a steady progress in
1994.
 India with its 20 million shareholders, is one of the largest
emerging markets in terms of the market capitalization.

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Securities Exchange Board Of India
 On April 12, 1988, SEBI was established with objective of
protecting the rights of small investors and regulating and
developing the stock markets in India.
 In 1992, the Bombay Stock Exchange (BSE),the leading stock
exchange in India, witnessed the first major scam masterminded
by Harshad Mehta.

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Securities Exchange Board Of India
 Analysts unanimously felt that if more powers had been given to
SEBI, the scam would not have happened.
 As a result the Government of India brought in a separate
legislation by the name of ‘SEBI Act 1992’and conferred statutory
powers to it.
 Since then, SEBI had introduced several stock market reforms.
These reforms significantly transformed the face of Indian Stock
Markets

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 Overstated assets and income
 The results announced on October 17, 2009
overstated quarterly Revenues by percent and
profits by 97 percent.
 The global head of internal audit also illegally
obtained loans for the company.
 Created 13000 fake salary accounts
 Created fake customer identities and generated
fake invoices to inflate revenue
Satyam Scandal

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Satyam Scandal
 The CEO was convinced that the gap in the balance sheets reached an
unmanageable heights and could not be filled.
 Satyam Computer crashed by Rs 139.15 or 77.69 per cent to close at
Rs 39.95, after the Chairman`s confession
 Bombay stock exchange fell 700 points
 The Sensex recorded the biggest single-day loss in the past two
months, after Satyam Computers Services, plunged 80 percent.

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Conclusion
 Corporate governance And economic development are
intrinsically linked.
 Effective corporate governance systems promote the
development of strong financial systems
 Which, in turn, have an unmistakably positive effect on
economic growth and poverty reduction.

14. THANK YOU