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PM tells industry to 'clean-up' its act

Close on the heels of market regulator Sebi unearthing a nexus between brokers, FIIs and overseas corporate bodies, Prime Minister Atal Bihari Vajpayee on Friday called on the business community to 'clean up' its act and give a better account of itself.

"We have had enough warning signals both in the initial years of liberalisation and also in the recent boom and fall in the stock markets. I urge the business community to clean up its act and give a better account of itself, both to the Government and to the people," Vajpayee said in his opening remarks at the meeting of Advisory Council on Trade and Industry.

Expressing serious concern over the recent developments in financial sectors which depressed business sentiments, the prime minister said: "They have once again highlighted the need for effective checks and balances to accompany increased autonomy devolved to financial institutions."

The Securities and Exchange Board of India, in its interim report on the stock market scam, held the nexus of brokers, foreign institutional investors and overseas corporate bodies guilty of market manipulations and crisis of confidence at the capital markets.

These developments have also shown up the overall poor standards of corporate governance, Vajpayee said.

They (developments at capital and financial markets) have also led to cynicism, among ordinary people. If unchecked, this will undermine public support for economic reforms, he said.

"While we are reforming our system of governance, I would like you (industry) to reform your system of corporate governance," Vajpayee added.

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