Regulating the Regulators

We, Indians have very short memory. We forget things very easily and move on with life. But this time even before you forget Satyam disaster and move on, news flashed about five IT Indian companies being debarred from receiving direct contracts from the World Bank group under its corporate procurement program for four years. This may not be shocking but finding Wipro name amongst the five companies is definitely a shock. Wipro is known for its transparency and integrity.

This really makes us think again about the corporate governance practices in India. Are there enough of regulations in place? Are the regulators doing their job to make sure the corporate practice these regulations fairly? Are some of the regulations causing the fraudulent behavior by corporate? Can regulators be held responsible legally and punished for irregularities?

These are some of the important questions needs immediate answers. May be making corporations declare financial results every quarter is creating needless competition amongst the corporate post growth on quarter on quarter basis. This could be one of the reasons for window dressing and leading ultimately to the end like Satyam. Any fraud or deceptive action can not be kept under the carpet for so long without the either ignorance or by involvement of the regulators be it an auditor, independent director, credit rating companies, or even ROC. Most surprising is the company getting the Golden Peacock award for best corporate governance practices found to be a fraud. What sort of research is done before giving away this award is also questionable?

When corporate world is expected to practice corporate governance which is nothing but being transparent and accountable to the all the stake holder, why not our regulators practice transparency and accountability. The irony of the situation is these regulators only given the job of investigation of these irregularities of the corporate.

There is a need to hold these implementers of the law responsible for their misconduct and ignorance. Unless that happens even if we have another set of new laws, which is normally a kneejerk reaction after big scams, we will still have more of Satyam taking place in future.