Pant unhappy with corp governance, divestment moves

NEW DELHI: Planning Commission deputy chairman KC Pant today took a rather critical view of corporate governance in India and the country’s experiment with privatisation.
He said corporate governance was affected by the existence of close ties between business interests and the government. As for privatisation, Mr Pant said the process had not resulted in significant improvement in efficiencies in the privatised PSUs.
The ties between business interest and government — which is an “important feature� in many developing countries — affects corporate governance “because large family businesses often use their influence to limit competition to obtain favourable finance from the government and alter the game in their favour,� Mr Pant said at a conference on privatisation and corporate governance of state-owned assets organised by Indian Council of Social Science Research (ICSSR) and Organisation for Economic Cooperation and Development (OECD) here today. Referring to such arrangement as crony capitalism, he said political remedies were required apart from normal investor protection measures. “However good corporate governance cannot lose sight of the broader context, which must be taken into account while dismantling unhealthy structures by offering opportunities for diversifying the ownership pattern,� he added