Corporate Governance in India & SEBI Regulations


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Corporate Governance in India & SEBI Regulations

  1. 1. Corporate Governance In India AndSEBI RegulationsPresented By:Atif GhayasAligarh Muslim University, Aligarh
  2. 2. 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
  3. 3. 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
  4. 4. 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
  5. 5. Here comes your footerKey players in CG Management Board of Directors Customers Shareholders Employees Regulators Suppliers
  6. 6. 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
  7. 7. 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
  8. 8. 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.
  9. 9. 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.
  10. 10. 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
  11. 11. 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
  12. 12. 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.
  13. 13. 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.
  14. 14. THANK YOU