1.Corporate Governance Failures in India (Corporate Governance)

What & Where
Governance defined as rules-practices-processes guiding corporate direction and control
Indian context spotlight: Gensol Engineering, BluSmart, BharatPe, GoMechanic, DHFL scandals
Goal: safeguard stakeholder interests via fairness, transparency, accountability, responsibility, risk management
Quick Facts for MCQs
Core Principles
- Fairness ensures equal voting rights for minority shareholders
- Transparency mandates timely disclosure of material financials and conflicts
- Accountability fostered through AGMs questioning board decisions
Failure Triggers
- Diversion of investor funds into personal luxury assets
- Falsified revenues inflating valuation to attract funding
- Weak board supervision under promoter dominance
Governance Tools
- Independent board oversight counters promoter influence
- Tiered financial controls flag high-value transactions for extra checks
- Conflict-of-interest declarations scrutinise related-party dealings
Recent Indian Cases
- Gensol promoters allegedly used EV funds to buy premium residences
- BluSmart routed capital through opaque loops violating disclosure norms
- GoMechanic confessed to revenue overstatement to secure investments
Key Data Points
| Feature | Data-Point |
|---|---|
| Core principles | Fairness, Transparency, Risk-management, Responsibility, Accountability |
| Key regulator | Securities & Exchange Board of India (SEBI) |
| SEBI ESG rule | Mandatory risk disclosure in annual filings |
| Independent directors norm | ≈ 1/3 of listed-company board |
| Typical control lapse | Related-party deals hidden via shell firms |
| Whistle-blower need | Anonymous, anti-retaliation system flagged as best practice |
| Audit safeguard | External audit + active audit committee |
| PYQ linkage | 2023 UPSC Q on moral integrity vs professional efficiency |
Related UPSC Prelims PYQs
भारत में निगमित सामाजिक उत्तरदायित्व (CSR) नियमों के संदर्भ में, निम्नलिखित कथनों पर विचार कीजिए:
To prevent recurrence of scams in Indian Capital Market, the Government of India has assigned regulatory powers to




