Two recent events have focussed attention on the issues of Corporate Governance and Corporate Ethics among private sector firms in India. First, Satyam Computer Services had to beat a hasty retreat from its outrageous decision to acquire Maytas Properties and take a 51% stake in Maytas Infra for $1.6 billion, in the face of strong shareholder opposition.
Second, in another less discussed incident, Rajya Sabha member and Chairman of the Bajaj Auto Ltd, Rahul Bajaj, in an obvious case of conflict of interest, blatantly used the question hour in the Parliament to campaign for sops to the auto industry to tide over the economic slowdown.
In this context comes the Transparency International’s 2008 Bribe Payers Index (BPI), which explores the degree to which companies from 22 of the world’s wealthiest and economically dominant countries are likely to engage in bribery when doing business abroad. And, expectedly, Indian companies comes out as the third most bribery prone. Russian firms leads the pack.
It appears that despite all high-minded talk and wailing about lack of leadership (including by the aforementioned worthy) among the political class in television channels in the aftermath of the recent Mumbai terror attacks, substantial sections of coporate India are in many ways sailing in the same boat as the very politicians they accuse with righteous indignation!
(HT: The Economist)
Siemens pays $1.6 bn in fines, the largest such payout, after pleading guilty of corrupt practices involving bribing foreign governments. The company had creatively itemized these expenditures in its balance sheet.