India Inc should avoid pushback on corporate governance, says Sinha

NEW DELHI: Former Sebi chairman U K Sinha has said that there has been pushback from India Inc on corporate governance issues, which may not be in the best interest of the economy.

“In the last one year, I am noticing that once there is a slight fear or apprehension about the state of the economy or the state of corporate profitability, some pushback from corporate sector has started to dilute things. That is not a very healthy thing. Good times or bad times, norms must be in place,” Sinha told TOI in an interview.

While he did not dwell into specifics, the corporate sector recently pushed for a deferment of the move to split post of chairman and MDs at large companies and restricting role of promoters. Similarly, it has sought to block a move to train independent directors.

The former civil servant, who headed UTI before taking over as the market regulator, recently released his memoirs — Going Public, My time at Sebi — is working closely on corporate governance issues after retiring.

He said that some of the problems, such as those at CG Power, had gone unnoticed and called for a revamp. Sinha also called for a revamp of the current structure for regulatory coordination as well as a massive upgrade of the RBI’s supervisory functions.

Sinha said there are too many members at the Financial Stability and Development Council (FSDC), headed by the finance minister, which is preventing decisions to be taken.

“The FSDC is not working properly. I have written about it, having dealt with it since 2002. Earlier, there were four five people in the room and there was intense discussion. Today, there are 15 people and everyone speaks for a few minutes and by the time everyone’s turn comes, it’s time to end the meeting,” he said.