Post-Satyam, regulator calls for better corporate governance

February 5th, 2009 - 8:05 pm ICT by IANS  

Mumbai, Feb 5 (IANS) The financial market regulator Thursday said corporate India had to be more transparent with shareholders and ensure corporate governance in the post-Satyam scenario.“Two actions which are being regarded by SEBI are: to require all listed companies to obtain peer audit done, and in case of pledging of promoter shareholding, to make this price sensitive information available to all other shareholders,” said Securities and Exchange Board of India (SEBI) chairman C.B. Bhave here.

“We have to recognise that the issue of corporate governance is a journey, which has to be constantly examined and continuous efforts are necessary to make it fruitful,” he said.

Bhave was speaking at a conference on corporate governance organised by the Confederation of Indian Industry (CII) in association with the ministry of corporate affairs and the National Foundation for Corporate Governance.

He said that after the revelation of the Satyam fraud, SEBI was actively considering introducing rules to ensure more rigorous audit and disclosures, such as having external agencies to conduct internet audit and rotational auditors.

He said SEBI could also consider a “whistleblower policy”, under which employees of a company can report any wrongdoing to the firm’s whistleblower committee without informing their supervisors or revealing their identities.

Detailing the regulatory response in any corporate malfunction, Bhave said the immediate response would be to analyse the causes and the measures needed to correct it.

CII president K.V. Kamath termed the Satyam issue as a “wake-up call”, stressing that the entire field of corporate governance needed to be addressed in greater depth.

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