The Corporate Affairs Minister, Mr Salman Khursheed, has his heart on promoting better corporate governance and ethics. He has gone as far as suggesting an exchange for logging credits for corporate social responsibility on the lines of carbon credits. On the sidelines of a recent CII conference here in Mumbai, Mr Khursheed spoke to newspersons on a range of issues concerning India Inc.
Excerpts from the interview.
Post the Satyam episode, what changes have been made to the Companies Bill 2009?
What happened in Satyam is not something that has not happened elsewhere. Therefore as we 
were working towards a more effective regulation, we have already accounted for a Satyam-like scenario in the Bill. It unfortunately could not be passed in September 2008.
were working towards a more effective regulation, we have already accounted for a Satyam-like scenario in the Bill. It unfortunately could not be passed in September 2008.However, now when the Bill goes back to Parliament, it looks like we have learned a lot from Satyam and made changes to the original draft Bill. The fact is we have not even changed a comma.
Virtually, everything we learned from Satyam has been accounted for in the Bill as it is a futuristic approach to a better regulation.
Post-Satyam, what we have done is to put in place an early warning system with analytical routes which are very objective in nature as there is no human element involved.
The system searches for data available under MCA 21 (the Ministry’s e-governance initiative). In addition to any information received from any source, the computer searches for aberrations or departures from a pattern and calls for close scrutiny. This system has been put in place a few months ago.
Will the new system prevent another Satyam like incident?
This new system is the best we can do, given the human understanding of fraud and the ability of the mind to create newer problems. We have done the best that we can do. It is like finding a cure for cancer; it is difficult to say a certain cure will put an end to cancer.
But the least I can say is that we have moved considerably forward from we were. Voluntary trials are on, but only time will tell whether we have a system which is effective or whether it has to be improved upon.
The process of appointment of independent directors to Public Sector Units has been very slow and it has affected the much-talked about disinvestment in these units. Do you see a role for your Ministry to fast-forward the exercise?
Please understand that this is a first generation attempt to disinvest the PSUs. Therefore the requirement of them being listed and that of compliance with Clause 49 is a learning experience for all those involved.
I am sure that the delays are due to good reasons. We are regulators for them (PSUs) as much as we are regulators for anybody else. We will talk among ourselves and with the Securities and Exchange Board of India (SEBI) to see how quickly we can ease the hiccups.
Recently, the Union Government had urged the US Securities of Exchange Commission (SEC) not to impose penalties on Satyam. Have you heard anything from the US regulator on this?
Being independent adjudicators, SEBI has a Memorandum of Understanding with SEC. We flagged the entire motion during the Prime Minister’s visit, since it can be done only at a political level.
Technical requirements for our request (for not penalising Satyam) can only be covered under the MoU. So officials from SEBI are in touch with the American regulators.
We are sure that the regulator there would be sensitive to our concerns.
