Business Ethics and Corporate Governance, Second Edition

POOR TRACK RECORD OF SHAREHOLDER PROTECTION IN INDIA

Though the above detailed analysis of shareholders’ rights as stressed by the Companies Act, other statues and various committees give any investor or the reader the impression that there are enough provisions in the laws of the land, there has hardly been any conviction under them all these years. The liberalization of the Indian economy since 1991 seems to have opened the floodgates of scams and provided vast opportunities to fly-by-night operators. These have destroyed shareholder values. As a result of some scams such as those involving UTI, non-banking finance companies, plantations and vanishing companies, millions of small investors lost their savings and investments. The plight of millions ...