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Money > Reuters > Report August 7, 2002 |1830 IST |
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SEBI plans corporate governance measuresMarket regulator Securities and Exchange Board of India said on Wednesday it was designing a system to measure corporate governance in Indian firms after a string of financial scandals in the US. Accounting irregularities that contributed to the bankruptcy of US energy trader Enron Corp and telecoms giant WorldCom group have fractured investor confidence across the globe. The US Congress is now under pressure to act to counter corporate fraud and rebuild that confidence. "Indian credit rating agencies are working on an instrument which will attempt to measure wealth creation, wealth management and wealth sharing," SEBI Chairman G N Bajpai told a seminar. "Our focus at SEBI would be to move corporate governance from mere form to substance," Bajpai said, but did not elaborate. He said rating agencies Credit Rating Information Services and ICRA Ltd would develop the model, which would have qualitative and numeric standards to benchmark Indian companies on various aspects of governance. He did not say when the model would become operational or whether it would be compulsory for the nearly 10,000 firms listed on 23 Indian stock exchanges. Bajpai said SEBI would revisit all its regulatory mechanisms dealing with listed firms over the next year to make the process more transparent. He said higher standards of corporate governance based on robust accounting practices were necessary to bring investors back to global stock markets. "The ultimate in regulation on this planet Earth is crumbling like a pack of cards, the United States' Securities Exchange Commission, which was supposed to be the mecca for all securities' regulators," Bajpai said. "No more can the US be a model for the rest of the world," he added. ALSO READ:
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