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This has a reference to “Rules of promoter-less corporates” (Business Line, January 29). The need for evolving a mechanism that serves the Indian environment has been felt for quite sometime.

Consider these facts. The Government of India found an ingenious way of funding/hiding huge budgetary deficits by divesting a small part of it’s holdings in several public undertakings — ONGC, GAIL, HPCL and BPCL, among others.

Now it has found a more ingenious way of continuing to do so by bleeding these: during the first nine months of the current fiscal ONGC’s PAT is impacted to the extent of Rs 15,310 crore. GAIL paid a subsidy of Rs 1,781 crore. What is more alarming is in this short span of time nearly half of HPCL’s net worth got eroded (that is, loss of Rs 4,529 crore to be written off against reserves of Rs 10,422 crore it had at the end of the last fiscal). What can prevent this promoter, owner, manager from siphoning funds to promote its socio-political agenda to the utter disregard of the interests of the minority shareholders? Who is the law-maker? Where is the code of corporate governance? And where does SEBI stand here?

Narayana Bhat e-mail

Independent directors

Vis-À-vis the article “Rules of promoter-less corporates” (Business Line, January 29), it would be difficult, if not impossible, to blame promoters for taking so called bad decisions for the company. How to decide that it’s a bad decision? Also would such an approach prevent promoters from taking bold decisions, ones that are good for the company, just to avoid risky consequences?

The better model would be to levy a strict penalty on all the directors, in case there is found to be deliberate wrongdoing or fraud. The fear of such loss of face should prevent independent directors from colluding with promoters.

Ashish Rampuria e-mail

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