The Failure of Corporate Governance at Infrastructure Leasing and Financial Services Limited: Lessons Learnt

2021 ◽  
Vol 10 (1) ◽  
pp. 63-76
Author(s):  
Gagan Kukreja ◽  
Sanjay Gupta ◽  
Meena Bhatia
Keyword(s):  
Corporate Governance ◽  
Stock Market ◽  
Financial Services ◽  
Agency Problem ◽  
Vital Role ◽  
Senior Management ◽  
Unethical Practices ◽  
The Government

This case study investigates multiple issues related to corporate governance, regulations, auditing and financial reporting of Infrastructure Leasing and Financial Services Limited (IL&FS). Combinations of these issues resulted in default in payment obligations by IL&FS in August 2018 originated from the agency problem. It posed a substantial systematic risk to the whole financial system of India. This case study highlights the severe drawback of concentration of decision-making and unprofessional work ethics at the senior management level. Further, the case study also provides the opportunity to discuss the inappropriate regulations and governance practices which cause a severe problem in long-standing and prominent organizations like IL&FS. Research Questions: (a) Discuss the vital role of corporate governance in major corporations and the reasons behind governance failures. (b) How did asset–liability mismatch create liquidity problems in a company which deals with long-term projects? (c) How does lack of a proper and unified regulatory framework for Non-Banking Financial Corporation (NBFC) harm investors’ interest? Link to Theory: This case study provides an opportunity to learn the role of corporate governance in NBFC. This case demonstrates the problems arisen because of agency problem and conflict of interest among real-world stakeholders. The case study also highlights the importance of assets–liabilities management in a strategically important organization like IL&FS. Phenomenon Studied: This case study attempts to understand the potential problems that occurred in IL&FS from the failure of good governance, lack of unified regulations for NBFCs and non-adherence of professional responsibilities by the external auditors. Case Context: The case study explores the vital role of the infrastructure development and financing companies in developing economies like India and how it may affect other vital entities of the financial system. Further, it demonstrates how unethical practices at senior management and lack of unified regulations can harm the organization. Findings: The research study found senior management’s potential involvement in unethical practices while managing the company. The financial statements did not reflect the true and fair picture of the entity, which misled investors and other stakeholders. It created chaos in the stock market, resulting in a loss to shareholders. The government set up a new board to restore the confidence of the stock market. Further, the government started to address the problems that arose. Discussions: The case of IL&FS by default, at first glance, looks like a case of asset–liability mismatch due to the lack of supervisory roles of the board and senior management’s massive regulatory failure. It is shocking how under the nose of regulators like Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Ministry of Corporate Affairs (MCA) a default of this scale could take place. How could IL&FS group grow unchecked into a massive 348 entity. It appeared that regulators, marquee shareholders (banks and institutions), and the board of directors failed in their fiduciary obligation to regulate and supervise IL&FS.

Corporate Governance Failure: A Case Study of Satyam

2010 ◽  
Vol 3 (2) ◽  
pp. 136-175
Author(s):  
Jai Prakash Sharma
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Corporate Policies ◽  
Unethical Practices ◽  
Corporate Governance Mechanisms ◽  
Unethical Activity ◽  
The Government ◽  
Similar Kind

Corporate Governance has become prominent over the last two decades as many countries witnessed corporates succumbing to questionable corporate policies and unethical practices, setting in motion reforms through codes and standards on corporate governance. India too had had its share of corporate scams. The recent fraud in Satyam has shattered the dreams of various investors, shocked the government and regulators alike and led to questioning the accounting practices of statutory auditors and corporate governance norms. Unethical business conduct, cooking of books of accounts, questionable role of audit committee, flawed ownership structure and other major governance flaws were noticed in the collapse of Satyam. As in USA, UK and other countries, India too needs similar kind of corporate governance reforms. Even though corporate governance mechanisms cannot prevent unethical activity by top management completely, but they can at least act as a means of detecting such activity before it is too late.

scholarly journals Konstantin Kavelin and the Struggle for Emancipation: A Case Study of the Westerners’ Role in the Foundation of Civil Society in Imperial Russia

2010 ◽  
pp. 57
Author(s):  
Curtis Richardson
Keyword(s):  
Civil Society ◽  
Vital Role ◽  
The Public ◽  
Imperial Russia ◽  
Russian State ◽  
Political Activist ◽  
The Government ◽  
Preparatory Work

This essay explores the emergence of civil society in Imperial Russia in the 1840s and 1850s through an analysis of the role of the public in the preparation for the emancipation of the serfs before the government made the commitment to manumit the serfs. To do so, the essay considers the role of the Westerners, specifically one of the leading Westerners, the legal historian Konstantin Kavelin, from archetypical abstract thinker into political activist within the circumscribed parameters of autocracy in Imperial Russia. Kavelin and his allies, both within and without the bureaucracy, developed reform programs in the harsh years in Russia from 1848 until 1855 in the hope that a time more propitious for reform would come thereby enabling them to act in concert with the government. The Westerners played a vital role in providing the necessary intellectual underpinnings for the Great Reforms, in disseminating these ideas to the public, and in working closely with reformist bureaucrats in their specific preparations. Kavelin‘s efforts, primarily his proposed drafts and contacts, proved pivotal in facilitating the emancipation preparations that led to the legislation and implementation of the reform. This preparatory work of the late 1840s and 1850s bore fruit when the Russian state emancipated the serfs in 1861. The aspirations for a partnership with the government however failed to materialize.

scholarly journals THE ROLE OF CORPORATE GOVERNANCE IN INDIAN BANKING COMPANIES

2021 ◽  
pp. 14-23
Author(s):  
Dr.K.Thirumamagal
Keyword(s):  
Corporate Governance ◽  
Private Sector ◽  
Financial Institutions ◽  
Business Environment ◽  
New Economic Policy ◽  
Unethical Practices ◽  
The Government ◽  
New Generation ◽  
First Time

The process of liberalization and deregulation was unleashed by the new economic policy of the Government of India during 1991. Reforms in financial sector opened the doors to the private sector Banks in the country and it paved way for the new generation banks. Customers welcomed these financial institutions and they were awaiting for this opportunity to make themselves comfortable with the services provided by private sector banks after experiencing poor services from Nationalized Banks. The unethical practices and increased corruption kept the management of different organization to fleece their customers which in turn resulted in the closing down of some big companies. The need of Corporate Governance was felt during the securities scam of Harshad Mehta’s in April 1992 involving a large number of banks and it resulted a drastic change for the first time in stock market that shook the confidence of investors. The practices of the Corporate Governance has to be constantly evaluated because of the uncertain and complex business environment in India. KEY WORDS: Banking Companies, Fraud, Scams, Corporate Governance

scholarly journals What matters? The role of values in transformations toward sustainability: a case study of coffee production in Burundi

2021 ◽  
Author(s):  
Milda Nordbø Rosenberg
Keyword(s):  
Vital Role ◽  
Ecological Systems ◽  
New Materialism ◽  
Discursive Practices ◽  
Coffee Production ◽  
Ethnographic Fieldwork ◽  
Dynamic Relations ◽  
Participatory Observation

AbstractThis paper examines the role of values in transformations toward sustainability. Values, generally defined as what people deem to matter, are increasingly gaining interest in and outside of academia. For example, sustainability aligns with specific values such as dignity, equality, safety, and harmony for people and nature. However, current approaches to values are mind-matter dualistic, and therefore failing to honor the inherently dynamic relations of socio-ecological systems. Drawing on new materialism, I explore values as part of the relations that make this world and propose to consider values as material-discursive practices. Ethnographic fieldwork was done in 2017 with coffee producers in Burundi who aimed to transform production by caring for the coffee and people that grow it. Based on interviews and participatory observation, I present how values were integral to transforming the relational aspects of coffee production. In this study, values of togetherness, care, dignity, and faith were dominant and were found to reconfigure the socio-ecological system of coffee production. I argue that values are inseparable from, and hence co-productive of, the material world that we experience and play a vital role in sustainability transformations.

The Labor Government's Industrial Relations Policy: Flexibility with Equity

1992 ◽  
Vol 3 (1) ◽  
pp. 112-125 ◽  
Author(s):  
Peter Cook
Keyword(s):  
Management Practices ◽  
Industrial Relations ◽  
Safety Net ◽  
International Markets ◽  
Vital Role ◽  
Workplace Culture ◽  
Equity And Efficiency ◽  
The Government ◽  
Wage Increases

The fundamental objective of the Government's industrial relations policy is to encourage and assist Australian companies and their employees to adopt work and management practices that will strengthen their capacity to compete successfully both in domestic and international markets. To this end we support co-operative and equitable workplace bargaining, with wage increases being linked to the reform of work practices and attitudes. Our support for decentralised bargaining is aimed at improving productivity by fostering a new workplace culture of striving for continuous improvement. We emphatically reject the view that such an outcome will be achieved by wholesale deregulation and reliance on unfettered market forces. The Government is committed, for both equity and efficiency reasons, to maintaining the Accord approach to wages policy. We are also committed to an independent Australian Industrial Relations Commission playing the vital role of protecting lower paid employees through the safety net of minimum award wages and conditions.

Entrepreneurs’ Perception of Banks’ Social Responsibility : A Haitian Case Study

2021 ◽  
Author(s):  
Bénédique Paul ◽  
◽  
Ahmad H. Juma'h ◽  
Florys Dorante ◽  
◽  
...  
Keyword(s):  
Social Responsibility ◽  
Financial Services ◽  
Public Perception ◽  
International Institutions ◽  
Banking Industry ◽  
Financial Intermediaries ◽  
Future Research ◽  
The Government ◽  
Corporate Social

Banks are the pillars of entrepreneurship expansion and economic development. In developing countries, where there is little public financial support for entrepreneurs, it is clear that banks, among other financial institutions, should be part of the solution to the problem of financing economic activity. As financial intermediaries, commercial banks need to enjoy good perception among entrepreneurs to improve their profitability. To achieve such objective, banks sometimes adopt social responsibility strategies to influence public perception of banks’ behavior. How do Haitian entrepreneurs perceive Haitian banks’ social responsibility? To answer this question, we collect empirical data among entrepreneurs of all size (micro, small and large). The findings help interesting discussions of banks perception among entrepreneurs divided by demographic (gender, location) and economic (sector, size, assets) characteristics. Among the main conclusions, we find that banks enjoy very bad perception among entrepreneurs (all size). Also, the special concessions given by the Government and other international institutions to the banking industry in Haiti help very few to increase the financial services for Haitian entrepreneurs. From our conclusion arise questions for future research to study the relations between entrepreneurs’ own practices of corporate social responsibility and their perception of banks social responsibility.

scholarly journals Pengaruh Good Corporate Governance dan Budaya Tri Hita Karana Pada Kinerja Bank Perkreditan Rakyat

2017 ◽  
pp. 17
Author(s):  
I Gusti Ayu Made Asri Dwija Putri ◽  
I.G.K.A Ulupui ◽  
Ni Gusti Putu Wirawati
Keyword(s):  
Corporate Governance ◽  
Regression Analysis ◽  
Sampling Method ◽  
Research Result ◽  
Economic Problem ◽  
Good Corporate Governance ◽  
Result Show ◽  
The Government ◽  
Cultural Effect

The purpose of this study, namely to obtain empirical evidence that the implementation of corporate governance affect the performance of “Bank Perkreditan Rakyat” ( rural banks), and the role of local culture “Tri Hita Karana “to the BPR’s performance. The population is all BPR located in Badung and Denpasar. The samples using purposive sampling method. The data in this study were collected using a questionnaire are distributed directly to the object of research. “BPR” number into the sample in this study was 65 Banks. Data analyzed by model Multiple Regression Analysis. The research result show that the principles of corporate governance and the local cultural effect on the performance of BPR in Badung and Denpasar. “Bank Perkreditan Rakyat”. The implication of the study is important for the government to solve the economic problem using Corporate Governance and Tri Hita Karana concept.  

Enhancing User Experience in Financial Services

2014 ◽  
Vol 6 (2) ◽  
pp. 12-22
Author(s):  
Fatma Molu ◽  
Nur Findik ◽  
Mustafa Dalci
Keyword(s):  
User Experience ◽  
Financial Services ◽  
Return On Investment ◽  
Customer Relationship ◽  
Specific Context ◽  
User Research ◽  
Banking Service ◽  
Digital Environments

The domain of User Experience (UX) involves studying, designing for and evaluating the experiences that people have through the use of a system. This use takes place in a specific context, which has an impact on, or contributes to, the UX. As enterprises make a focus on the customer integral to their strategies, they need to recognize that technology developments are changing the customer relationship. In today's world, a great number of interactions between financial services and their customers have moved to digital environments and as a result a user interface design's significance increases in shaping the digital, financial experience.Based on this increasing importance, this paper proposes the role of usability studies for return on investment, along with a case study carried out in Kuveyt Turk Participation Bank. It involves an extended user research of online bank services which resulted with new specifications to be applied in the new corporate online banking service.

scholarly journals Demonetisation Impact over Banking Loans & Advances: A Case Study

2019 ◽  
Vol 7 (4) ◽  
pp. 51-64
Author(s):  
Narsaiah Neralla
Keyword(s):  
Financial Services ◽  
Banking Sector ◽  
Study Data ◽  
Ecosystem Dynamics ◽  
Banking Services ◽  
Legal Tender ◽  
The Status ◽  
The Government ◽  
Case Study Data

The demonetisation footstep by the Government of India twisted complicated influences in the economy. Complete sectors of the economy had faced and produced mixed sensation results over the decision of demonetisation. India’s financial services struggled with demonetisation; on the other hand demonetisation affects utmost over the banking sector because it is substantial influenced services to transform money circulation in an Indian economy. Eradicating components of currency notes from circulation in an economy is demonetisation. It is as the processes of components of money are denied the status of legal tender. Consequently, ceased currency notes will not be account as valid currency in an economy. The term ‘demonetization’ is an instrument to shrink Inflation, Black Money, Corruption and terror funding, this step discourages a cash dependent economy in India. Government of India drive towards demonetisation has given a strong push to the popularity of digital banking and made helps with the alternative arrangements of e-banking and e –wallet to trade and commerce. Exploring the demonetisation emergence in an economy and impact on banking services ecosystem dynamics, this study take an abductive approach anchored in over 4 years of case study data regarding. The present study foremost intention is to be analysing the demonetisation impact over banking loans and advances. In this regard the present study is to be examining the pre demonetisation and post demonetisation period.

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