Financial Daily from THE HINDU group of publications
Wednesday, Oct 09, 2002
Financial Daily from THE HINDU group of publications Wednesday, Oct 09, 2002 |
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Corporate
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Corporate Governance 2 cos seek ICRA rating on governance Our Bureau
NEW DELHI, Oct. 8 CORPORATE governance rating as a concept is gaining acceptance among corporates in the country. ICRA Ltd, a rating agency, today said that two more listed companies had sought corporate governance ratings. "Corporate governance has become a global issue today. Corporate governance rating help companies improve market confidence in them, besides improving efficiency of the entity. "After ITC, we had assigned corporate governance rating to another company which, however, had not accepted our rating. Two more companies have approached us," Mr P.K. Choudhury, Managing Director, ICRA, said at an Assocham conference on `Corporate governance rating' here. He declined to name the company that had not accepted ICRA's corporate governance rating. He said that ICRA disclosed public ratings only on acceptance by the company that is rated. "The contract is between a rating agency and a company. It is not necessary for us to make the corporate governance rating public in cases where the company has not accepted our rating," he said. A senior ICRA official told Business Line that the company that had not accepted the corporate governance rating was from the "engineering sector". The two companies that had now approached ICRA for corporate governance rating were from the "consumer goods" sector, he said. He also said that the rating agency planned to offer the service of corporate governance rating in other countries if the service were to be successful in India. He said corporate governance rating had no direct linkage with credit ratings and that a high corporate governance rating did not necessarily imply high credit rating. Credit ratings are a measure of credit risk and its determinants are business outlook, competitive position, operational efficiencies and financial position. Corporate Governance Rating is an assessment of management conduct, its fairness and transparency. Mr Choudhury also said that ICRA planned to undertake "Health Care grading" in the coming months. "We will be undertaking a pilot project with a hospital in the southern part of the country," he said.
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