The Role Of Fis

Your editorial Are the institutions asleep (February 6) regarding the role of financial institutions in corporate governance as one of the major shareholder is quite provocative.

Before shifting the onus of taking action to FIs, one should also consider the fact that the role of FIs is not to interfere in the day-to-day management of a company even if they are represented on its board. Surely, they are equipped to monitor the progress of the company but that should be on a continuous basis and not at a time when things are out of control.

In the case of Dunlop, the FIs are not represented on its board as such. Before any action is taken by FIs, they should ascertain the truth as taking sides does not help the cause of the company. Whether the action of the MD is right or wrong should not be judged from media reports.