Financial Daily from THE HINDU group of publications
Sunday, Dec 18, 2005
Financial Daily from THE HINDU group of publications Sunday, Dec 18, 2005 |
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Corporate
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Corporate Governance Markets - Financial Institutions `Institutional investors must watch corporate governance norms' Our Bureau
The Minister for Company Affairs, Mr Prem Chand Gupta, releasing a brochure along with the World Bank Country Director- India, Mr Michael Carter, and the Bombay Stock Exchange Managing Director & CEO, Mr Rajnikant Patel, in the Capital on Saturday. — Kamal Narang
New Delhi , Dec. 17 THE Ministry for Company Affairs on Saturday urged financial institutions to play a major role in making the corporate sector adhere to good corporate governance practice. Speaking at a roundtable on `Role of Institutional Investors in the Corporate Governance of their Portfolio Companies' the Minister of State (Independent Charge) for Company Affairs, Mr Prem Chand Gupta, said, "These days institutional investors generally hold substantial percentage of shares in any company and have the right to nominate directors on the board of such companies. They are certainly in a position to see that the companies are not deviating from the norms of good corporate governance.'' The roundtable was organised by the National Foundation for Corporate Governance with the Confederation of Indian Industry and the World Bank. Talking about the initiatives undertaken by his Ministry, Mr Gupta said a major revision of the Companies Act is at an advanced stage, which is expected to improve the image of corporate governance in the country. He stated that this was one of the several initiatives taken by the Government for furthering and promoting good corporate governance. On the changing role of the institutional investors, Mr Gupta said, "India has a large number of institutional investors both from within and outside the country. For this, the role of good corporate governance has been highlighted by the McKinsey and the World Bank report, which shows that the international investors do not mind paying premium to invest in companies with good governance." In her keynote address, Ms Komal Anand, Secretary, Ministry of Company Affairs, said in view of the increasing role of institutional investors in India, there is need for a debate on the duties and obligations that these institutions should have with regard to corporate governance, in terms of disclosure policies and management of their voting rights. Mr Michael Carter, Country Director-India, World Bank, said that the 2004 Corporate Governance assessment conducted by the World Bank has benchmarked India's Corporate Governance framework to the globally accepted OECD principles of Corporate Governance. This assessment, he said, has found that a series of legal and other reforms taken by India in the last few years, has transformed Indian Corporate Governance framework and proved responsibility and accountability.
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