Corpoaret Governance - Need
Corpoaret Governance - Need
2. Accountability
3. Empowerment
4. Ethics
5. Fairness
Meaning
Members are directly liable in case of ultra vires activities
members can not take shield of Corporate personality for unjust results
Personal responsibility and no application of Limited Liability
Used The Banking System Banks- lend each other money- ready forward agreement
which is basically a bank receipt which is backed by some collateral
took advantage of the many loopholes in the banking system and use of funds from
inter-bank transactions
Satyam Scam , 2009
Manipulation in gap between actual operating profit and the one reflected in the
books of account
Burden to maintain goodwill –
Role of Auditor (Price Waterhouse)- Fraudulent Reporting
https://www.researchgate.net/publication/282331448_Corporate_Accounting_Fraud_A_Case_Study_of_Satyam_Comput
ers_Limited/link/561496d708ae983c1b40a0d4/download
The Punjab and Maharashtra Bank scam
BOD of the PMC bank has given huge loan to the Housing Development and
Infrastructure Ltd (HDIL) and its group entities.
This fraud case is related to transfer of 70% of the total credit facilities of the PMC
bank to HDIL and its associated companies.
Now the total NPA of the bank has grown to 73%. Now the Enforcement Directorate
(ED) has sealed the assets of the HDIL group and the trustees of PMC Bank and
criminal proceedings have begun.
It is found that around 21,049 bank accounts were opened by bogus names to conceal
44 loan accounts. The bank's software was also tampered to conceal these loan
accounts.
https://www.business-standard.com/about/what-is-pmc-bank-crisis
Corporate Debacles in India
Bhushan Steel
Unexpected decline in business- the company experienced glory to grief
The company’s total debts stand at Rs. 46,062 crore that have again choked
India’s banking system.
Company promoters blame these defaults on a global recession, poor regulation
and sheer bad luck.
Banks are backing risky bets on promoters comfortable growing their businesses
on borrowed money. (LOI)
https
://www.hindustantimes.com/business-news/npa-crisis-the-rise-and-fall-of-bhusha
n-steel-in-the-great-indian-debt-trap/story-GHrvRRFIBsMLXKJzbqvaFN.html
IL&FS (Infrastructure Leasing & Financial Services)
defaulted its loans
There was sudden rise in the NPA of the company in one year from Rs.410 crores
to Rs.816 crores was surprisingly high.
Mismanagement of Funds
Company files for bankruptcy.
https://www.ilfsindia.com/claim-management/
Jet Airways
http://www.jetir.org/papers/JETIR2007188.pdf
Network expansion- Purchase of Air Sahara for $500 million in cash. ●
Rebranding it as "Jet Lite"
Fluctuations in the global crude prices
Fall of Indian rupee - - soaring fuel costs
Jet was given loans of far higher value than the collateral provided
Filed for Bankruptcy
Business and Ethcis
Norms of Corporate Governance
Ideal Governance
Norms of Corporate Governance
Fair Leadership
Board Appointments
Compliance
Communication
Accountability
Risk Management
Stakeholder Protection
Government Companies