Corporate Governance Concerns - Indian Companies
(This
is for information purposes only. This should not be construed as a
recommendation or investment advice even though the author is a CFA Charterholder. Please consult your financial
adviser before taking any investment decision. Safe to assume the author has a vested
interest in stocks / investments discussed if any.)
According to BSE Limited, one of India's two premier stock exchanges, there are about 4,800 listed companies with equity capital in India. Out of which, around 4,300 companies are available for trade.
As the number of listed companies is one of the highest, so will be the corporate governance concerns with these listed firms.
Several companies take actions that are not in the best interest of minority shareholders. Some activities undertaken by promoters / management are not aligned with the interests of minority shareholders.
We investors suffer from survivorship bias, which blinds us to look only at successful companies ignoring thousands of failed firms. For every Infosys, you have scores of failed companies, like, Satyam Computers.
This blog is an attempt to list out listed companies that are or have faced corporate governance concerns. This will be updated intermittently with new companies at the top. This is not an exhaustive list, but only illustrative.
These are companies that are under scrutiny by activist investors, regulators like SEBI, RBI and IRDAI, and others.
The allegations / suspicions / compliance violations may be proved incorrect subsequently -- but as investors we have to be careful about our hard-earned money and need to be aware of the misdeeds proven or otherwise of promoters / management of listed companies.
This blog may help potential investors to analyse companies from several angles, including corporate governance concerns if any.
Annexure 1 below lists out Twitter / Post X handles that caution investors about companies with poor corporate governance standards.
Annexure 2 gives a list of other companies with poor corporate governance norms.
13Dec2024 Tweet thread- Mishtaan Foods - circular trading, shell companies and cooked financials
03Dec2024 Tweet thread - CE Info Systems (MapmyIndia) - promoter investments in related businesses
22Nov2024 Tweet - Apollo Micro Systems - company withdrew Warrants issue after FPI investors backed out at the last minute
21Nov2024 Tweet thread - Gautam Adani group after the US Bribery Charges and SEC Investigation
26Nov2024 Tweet thread - C2C Advanced Systems Ltd - listing of SME IPO postponed, but subsequently got listed
11Oct2024 Tweet thread - Trafiksol ITS Technologies Ltd - SEBI cancelled the listing of SME IPO after money was collected - diversion of funds, misstatement of financial statements, etc.
06Jul2024 Tweet thread - Raymond Ltd and Raymond Lifestyle Ltd - promoter Gautam Singhania
08Jun2024 Tweet - Suzlon Energy - independent director resigns citing weak corporate governance standards
07Jun2024 Tweet thread - VIP Industries - independent director resigns citing differences on leadership accountability and succession planning
17Nov2023 Tweet - Religare Enterprises - ESOPs to chairperson Dr Rashmi Saluja, no shareholder approval - Burman family stake - legacy of Malvinder and Shivinder Singh of erstwhile Ranbaxy
Bharat Global Services Ltd
Brightcom Group
Polycab India
Zee Entertainment Enterprises Ltd (Essel group)
Indiabulls Housing Finance (now renamed Sammaan Capital)
04Feb2023 Blog - Meltdown in Adani group stocks after Hindenburg allegations - related blogs here, here and here
Leel Electricals Ltd, formerly Lloyd Electric and Engineering Ltd, (once a favourite of veteran money manager Porinju Veliyath) - 'Chor' companies - alleged siphoning of funds
18Jun2018 Tweet - Infibeam Avenues - The Ken Web
16Jun2018 Tweet - Auditors' resignations - Vakrangee Ltd, Manpasand Beverages, Atlanta Ltd and Inox Winds
31May2018 Tweet - Atlanta Ltd - promoters were censured by Sebi for manipulation
18May2018 Tweet - Kitex Garments Ltd - Amit Mantri - related party transactions - similar businesses by promoter entities - holding high debt and high cash simultaneously
06Dec2016 Tweet - Manpasand Beverages Ltd - when Mr Amit Mantri cautioned about the stock on 06Dec2016, the stock price was Rs 280, but it rose to Rs 490 by Jan2018 before the share price collapsed -- the thing is investors unfortunately don't care about red flags and continue their foolhardiness with stocks with suspect fundamentals and manipulation
06Jun2016 Tweet - Tree House Education & Accessories Ltd - high receivables - possible stock price manipulation ahead of QIP
23Apr2009 Tweet thread Pyramid Saimira Theatre Ltd - forged SEBI letter
Vakrangee Ltd
PC Jeweller Ltd
IL&FS Investment Managers
IL&FS Transportation Networks
GTL Infrastrcture Ltd and GTL Ltd
DHFL or Dewan Housing Finance Ltd
erstwhile Crompton Greaves Ltd (Gautam Thapar's CG Power -- later in the hands of Murugappa group)
Reliance Power
Reliance Communications
Reliance Home Finance
Reliance Infrastructure
Kishore Biyani group companies:
Future Retail
Future Consumer
Future Lifestyle Fashions
Annexure 1
Twitter / Post X handles that caution investors ahead of corporate governance, rather corporate misgovernance issues.
What is remarkable is good people, like, Sucheta Dalal and Debashis Basu have been informing investors, in real time, about the tricks employed by several financial market participants to dupe gullible and greedy investors.
For example, Sucheta Dalal and Debashis Basu have been informing public, in real time, about the IL&FS financial scandal and NSE co-location scam much before the regulators woke up from their slumber.
Sucheta Dalal is already widely known as the journalist that exposed the Harshad Mehta scam back in 1992.
Leading_nowhere - DIY investor
Sucheta Dalal - Journalist, Activist and Author
Debashis Basu - Journalist, Author and co-founder of MoneyLife
R Balakrishnan - Finance, Accounts and Investing
Amit Mantri - Fund Manager at 2Point2 Capital
eeswardev - Jagadeesh, vet doctor
Dr Vijay Malik - SEBI registered research analyst provides a detailed analysis of companies in his various blogs
Annexure 2
List of companies that have not survived or are struggling to survive due to various business related issues, corporate governance concerns, outright fraud and siphoning of money.
Yes Bank - original promoters, Rana Kapoor and family, were shunted out
ICSA (India) Ltd
Satyam Computers
Rolta India
Educomp Solutions Ltd
Talwalkars Better Value Fitness Ltd (gyms, spas, yoga, etc)
Talwalkars Healthclubs Ltd (gyms, spas, yoga, etc)
Jaypee group stocks, like, Jaiprakash Associates and Jaiprakash Power Ventures
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Disclosure: I've got a vested interest in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.
Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets.
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