When Arbitrage Pays

The Confederation of Indian Industry (CII) has launched a novel service

for the corporate sector to help it improve its financial disclosures to

the shareholders and meet global standards on corporate governance.

Announcing this at a news conference in Mumbai, the CII president Rahul

Bajaj said the Corporate Governance Consulting Services of CII would

help companies increase their disclosures as per global standards and

prepare globally acceptable annual reports.

Already, CII had received enquires from 10 firms of the Group A list of

companies on the Bombay Stock Exchange, Bajaj said. The companies are

seeking CII help in widening the scope of disclosure and thereby enhance

shareholder value.

"CII will also interact with stock exchanges and the Securities and

Exchange Board of India (Sebi) to design listing requirements that will

call for greater disclosures and a higher percentage of independent

directors on companies' boards," he said.

Bajaj said no company could expect to attract global capital, debt or

equity, with poor corporate governance and disclosures. According to

him. CII will work towards bringing back trust in Indian companies.

Already, CII's code of corporate governance, published in April 1998,

had been followed by companies like Infosys and Dr Reddy's Laboratories,

he said.

 d still have a long residual

life," Ficci president Sudhir Jalan said. He said the argument against

import of second-hand capital goods in the past was that it could be

used to siphon precious foreign exchange out of the country against

import of what was actually scrap.