Need for ethics, corporate governance standards in startups: Piyush Goyal

While Goyal did mention the name of the startup, his statement comes after there have been several reports of corporate governance lapses at the unicorn Bharat Pe over the last few months.

New-age companies must strengthen ethical and corporate governance standards, said commerce and industry minister Piyush Goyal on Thursday as reports come in of data fraud and tax evasion at Indian startups.

Malpractices must be clipped early, otherwise it will earn a bad name for startups. “We have by and large been insulated by these problems, I hope these don’t become a norm in the future. It will kill the entrepreneurial spirit of young startups and can have damaging effects in the years to come,” Goyal said at an virtual event organised by the Confederation of Indian Industry (CII).

There is a need for setting up standards within the startup ecosystem, in which auditors can announce the world transparently, if something goes wrong. “Please do take this subject very seriously in your internal interactions and see if we can set up some standards for self regulation in the startup ecosystem.”

While Goyal did not mention the name of the startup, his statement comes after there have been several reports of corporate governance lapses at the unicorn Bharat Pe over the last few months.

He urged startups to incorporate and list companies in India and not leave the nation’s border for ‘just a few dollars more’, and go to tax havens or other countries. “If you have any issue, please tell us about it, we will talk to other departments within the government, make every effort to resolve them,” he said.

The industry has asked the government to allow direct overseas listing of Indian startups, which they believe can be a big reform measure for the sector. According to the existing rules, Indian companies are not allowed to list on foreign exchanges directly if they are not listed on the domestic bourses.

Last year, some unicorns and venture capital firms had also written to the Prime Minister to allow direct overseas listing of Indian companies as they believe the move can result in specialised investors to invest in these companies and also produce multinational tech giants.