The Hindu : Corporate fraud

Online edition of India's National Newspaper
Friday, Aug 30, 2002

Opinion

Opinion - Letters to the Editor

Corporate fraud

Sir, — The write-up `Corporate fraud' by Sushma Ramachandran (Aug 26) is a critical analysis of how corporate governance is inextricably intertwined with good government performance. Very stringent requirements arising out of the U.S. Sabanes — Oxley Act (the Corporate Reform Act) passed in July 2002 following the spate of high profile scams in that country — have made the Indian companies having shares listed in the U.S. to strengthen their structures, including internal audit mechanisms.

As the scandals rocked the U.S. earlier, the office of Government Ethics (OGE) was established by the Ethics in Government Act of 1978. But the functioning of OGE suffered from several constraints. When the performance in tackling corruption and scams in such a large democracy as the U.S. is not so encouraging, the creation of a Serious Frauds Office in the Union Finance Ministry may not be helpful without a fundamental change in the mindset of the political bosses and administrators.

K. Ramamurthi,
Chennai

* * *

Sir, — Ms. Sushma Ramachandran has traced the history, origin, past and present of corporate fraud in a nutshell. The need of the hour is good governance by a government with an untainted track record.

The poll ordinance, drafted specifically to nullify an Election Commission order which was based on a Supreme Court directive and which made it mandatory for candidates seeking election to come clear with their criminal past and declare their financial assets, promises more bad governance.

T. Balachandran,
Cochin, Kerala

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