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Sebi chief talks tough

Mumbai: Sebi chairman Ajay Tyagi on Thursday said there is a "distinct blur" in letter and spirit with regard to the corporate governance practices followed by companies.

According to the Sebi chief, though companies follow rules, they are unlikely to stand the scrutiny of law if their corporate governance practices are put to test.

"However, if one delves deeper, one could find that while the letter of the law may have been complied with, the spirit of regulations has not necessarily been embraced wholeheartedly,'' he said at the 4th annual Corporate Governance Summit on "Gatekeepers of Governance''.

Listing out the instances of corporate misdoings in different parts of the world, he said: "Our own jurisdiction has also been marred by various corporate scandals."

Without taking any specific names or cases, he pointed out that these range from suppression of information to selective sharing of information to falsification of accounts to other aspects of misgovernance such as poor board evaluation and inequitable executive compensation.

Tyagi noted that the scandals of Enron, Parmalat and WorldCom shook investor confidence and spurred governance reforms. However, even as various jurisdictions have tried to address the challenges posed by such scandals, the instances of misgovernance have also seen an evolution.

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