Companies are expected to adopt preeminent corporate governance practices to increase the confidence of investors and stakeholders. Scrutiny of the books of account conducted by auditors rotated periodically would add further value in strengthening governance.
Partner
Mulla & Mulla & Craigie Blunt & Caroe
Corporate governance structure in India is governed by clause 49 of the listing agreement entered between a company and the recognized stock exchanges where the securities of the company are listed. Section 21 of the Securities Contracts (Regulation) Act (SCRA), 1956, gives statutory power to clause 49 of the listing agreement by providing that where the securities of a company are listed in any of the recognized stock exchanges, the company must comply with the conditions of the listing agreement entered with the stock exchanges.
Further, section 23E of SCRA provides that if the company fails to comply with the listing conditions or breaches a listing agreement, it will be liable for a penalty not exceeding ₹250 million (US$4.5 million).
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Shardul Thacker is a partner at Mulla & Mulla & Craigie Blunt & Caroe in Mumbai.
Mulla House
51, Mahatma Gandhi Road, Flora Fountain
Mumbai 400 001, India
Tel: +91 22 2262 3191 / +91 22 6634 5496
Fax: +91 22 6634 5497
Email: shardul.thacker@mullaandmulla.com
