Country Analyses, Second Edition
- Elgar original reference
Edited by Christine A. Mallin
19 Corporate governance developments in India Shri Bhagwan Dahiya and Nandita Rathee Profits earned by hook or crook can not be the sole criterion for judging the success of a business. The success of liberalization requires the steady development of a new corporate ethic. Prime Minister Atat Bihari Vajpayee, 15 August 2001 address INTRODUCTION The corporate sector in India is governed by the Companies Act of 1956 which aims to ensure adequate protection of the interests of creditors and shareholders and regulates the issue, transfer and allotment of securities; the Securities Contracts (Regulation) Act of 1956 which covers all aspects of securities’ trading and regulates the operations of the stock market; the Securities and Exchange Board of India (SEBI) Act of 1992 which protects the interests of shareholders and promotes and regulates the securities markets; and the Sick Industrial Companies (Special Provision) Act (SICA) of 1985 which deals with the financial reorganization (including bankruptcy procedures) of distressed companies. India’s corporate sector consists of private limited and public limited companies. There were 786 744 companies limited by shares in India as on 31 March 2009. These included 785 183 non-government companies and 1591 government companies. Out of 786 744 companies limited by shares, 82 058 companies were public limited and 704 716 were private limited companies (GOI, 2009c). Although India has 22 stock exchanges, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) together accounted for 99.96 per cent of the total turnover in 2008–09 (SEBI, 2009). In...
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