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Corporate Governance In India And

SEBI Regulations
Presented By:
Atif Ghayas
Aligarh Muslim University, Aligarh
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Key players
Principles of Corporate Governance
Objectives of Corporate Governance
Corporate Governance in India
Securities Exchange Board Of India
Satyam Scandal
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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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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 companys bylaws, and formal
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Key players in CG
Board of Directors

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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.

Indias economic reform programme made a steady progress in

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 1992and conferred statutory
powers to it.

Since then, SEBI had introduced several stock market reforms.
These reforms significantly transformed the face of Indian Stock

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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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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.