Corporate Governance in India's Infrastructure Sector: Issues and Perspectives

IDFC Law Reporter, Third Anniversary Issue, p. 93, 2011

12 Pages Posted: 21 Nov 2011 Last revised: 27 Nov 2012

See all articles by Umakanth Varottil

Umakanth Varottil

National University of Singapore (NUS) - Faculty of Law

Date Written: November 20, 2011

Abstract

This article seeks to examine the specific issues and concerns pertaining to corporate governance in the infrastructure sector more generally, and in India in particular. It identifies three key relationships and issues therein. First, corporate governance framework defines the manner in which managers of infrastructure companies can be incentivised to demonstrate optimal performance so as to benefit shareholders and lenders. Second, the infrastructure sector in India is vulnerable to the ill-effects of related party transactions that put external or minority shareholders at a disadvantage compared to the insider shareholders or promoters, and this requires the imposition of checks and balances that monitor the impact of related party transactions to ensure fairness on all shareholder constituencies. Third, appropriate corporate governance mechanisms will minimise the adverse impact of infrastructure activity on stakeholders outside the industry, and also act as a driving force in the fight against corruption and in otherwise advancing public interest.

Keywords: Infrastructure sector, corporate governance, India, related-party transactions, corruption

JEL Classification: K22, G38

Suggested Citation

Varottil, Umakanth, Corporate Governance in India's Infrastructure Sector: Issues and Perspectives (November 20, 2011). IDFC Law Reporter, Third Anniversary Issue, p. 93, 2011. Available at SSRN: https://ssrn.com/abstract=1962383 or http://dx.doi.org/10.2139/ssrn.1962383

Umakanth Varottil (Contact Author)

National University of Singapore (NUS) - Faculty of Law ( email )

469G Bukit Timah Road
Eu Tong Sen Building
Singapore, 259776
Singapore

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