In December last year,Tsutomu Une,chairman of Ranbaxy,wrote to shareholders that the company has always believed in a sound code of corporate governance as a tool for establishing the highest standards of management and business integrity… .
STOCK MARKETS LINKS
Four and a half months later,the US subsidiary of the company pleaded guilty to felony charges relating to manufacture and distribution of adulterated drugs.
Ranbaxy is the latest example of how corporate governance takes a back seat in larger scheme of things in a company,experts say.
In Ranbaxy,I dont think all proper corporate governance measures were adopted by the company, Anil Singhvi,former Gujarat Ambuja Cements CEO.
Prithvi Haldea,CMD,PRIME database,says,If you serve adulterated food in a restaurant knowingly,it is not only a corporate governance issue,it is the issue of ethics and morality. In the aftermath of the Satyam scam 2009,the government introduced changes in the proposed Companies bill,2012,which is pending passage in the Rajya Sabha.
However,Haldea said the bill is hardly going to be a deterrent for the simple reason that independent directors are not independent in India. Instead of fixing responsibility on independent directors,it is promoters and auditors who should be held responsible for such acts.
According to Singhvi,most boards are stuffed with friends,relatives and not really independent directors. The fear of law is the best form of corporate governance, Haldea said adding that it is high time India puts a whistle-blower policy in place.