Why is guarding our borders a challenge?
Today, India is ringed by turbulent states -- Pakistan ,Nepal Bangladesh and Myanmar.
That's a whopping 10,619 km of border to be guarded! If you add the 3440 km border with China, what have you? The fact that terrorists have perfected the art of infiltration, aided and abetted by state or non-state actors in our neighbourhood makes it a very complex task indeed.
International
- Bernie Madoff pleads guilty
- He pleaded guilty to all the 11 counts of charges levelled against him by the prosecutors.
- Some legal experts and others have speculated that he is sacrificing himself to protect his wife, his family and friends.
- Prosecutors gave assurances they are investigating Madoff's wife and other family members and employees to determine what role, if any, they played in the scam.
- The 70-year-old financier who was once chairman of the Nasdaq exchange will be sentenced June 16 on 11 counts, including securities fraud and perjury. He could also be fined and ordered to pay restitution to his victims and forfeit any ill-gotten gains.
- What is most notable about this whole affair is the speed with which the American judicial/prosecution system was able to bring him to justice.
- The $65 bn scandal broke out in December. He pleads guilty before the expiry of the third month! Can we ever, in India, expect such speedy justice?
Opinion
Reformation of corporate Governance
In spite of what the government says, Satyam is not a stand-alone case. There have been similar cases in the past, such as the Dharma Teja in India and Enron or WorldCom in the US.
Independent directors:
IDs are responsible for two things: overseeing strategy and overseeing financial propriety and legal compliances.
Remuneration to IDs needs to be regulated in a manner that will ensure that they adhere to their cardinal responsibility without fear or favour: by doing away with commissions on profit and restricting their remuneration to reasonable sitting fees.
Simultaneously, they should be protected from any liability, so that they are empowered to discharge their responsibilities.
Secondly, the whistleblower mechanism needs to be encouraged and institutionalised. the media and regulators are the two external whistleblowers, often acting on suspicious movements in the company, while employees are the internal ones.
Role of auditors:
Auditors are required to check the accounts faithfully, yet they fail.
Firstly, rotation of auditors should be mandatory after every three years, and a strong disincentive by way of heavy fines should be legislated to ensure that auditors do their job properly.
Promoters and management :
For vanishing companies the Companies Act already prescribes barriers that such promoters will be barred from raising further capital in the market and their names are put on the government’s website, etc. A suggestion has also been made that promoters should be barred from holding management positions after some time.
Enforcement system coherence:
In the Satyam case both Sebi and the Serious Fraud Investigating Office had to approach the local courts to get an access to Raju to even conduct investigations.
