The Telegraph
Since 1st March, 1999
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Bajaj potshot at corporate ethics code

Mumbai, April 11: Rahul Bajaj took off again! This time it was on corporate governance.

He used the CII podium today to launch a tirade against some of the recommendations made by the Naresh Chandra committee and the Narayana Murthy committee on corporate governance.

“Let’s not go overboard with corporate governance,” he warned.

Bajaj was addressing a seminar on ‘Competing in Turbulent Times — Target 8% Growth: A Dream or Possibility’ organised by the Confederation of Indian Industry (CII).

While he agrees with many of the recommendations of the two committees, he is peeved about the recommendation on independent directors. The Naresh Chandra committee had suggested a cap on the term of office of a non-executive (independent) director.

The committee noted that persons should be eligible for the office of non-executive director so long as the term of office does not exceed nine years — three terms of three years each running continuously.

Bajaj feels “it is an insult” to a person. For nine years an independent director is eligible and after nine years he loses his credibility and his independence, he wondered.

Incidentally, Naresh Chandra is a director on the board of Bajaj Auto.

Sources told The Telegraph on conditions of anonymity that Chandra himself was not in favour of the recommendation.

Declaring that corporate governance codes in the country are better than those prevailing in other developing countries, Bajaj said that the business community must not be defensive while protesting certain recommendations that are not in the interest of the industry.

He also argued in favour of general and state elections to be held simultaneously and after every five years. Any vote of no-confidence should be followed by a vote of confidence for the alternate government mirroring the German constitution, he pointed out. All elections should be government funded.

He also opposed rollbacks like the urea price revision, which, he said, is dictated by elections.

“Every second year we have some elections which brings in its wake political expediency. What is happening to VAT is shameful and shocking.”

He spoke in favour of a reformist government that would remove bleeders like fiscal deficits, curb losses in monopolies as well as other PSUs and bring about flexible labour laws

Delivering the keynote address at the conference R. Chidambaram, principal scientific adviser to the government of India, spoke on building and sustaining a technology base to aid the country’s growth process.

He feels that technology can help India achieve an 8-10 per cent growth level.

The purpose of technology is to create wealth, improve quality of life and enhance national security, he added.

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