Family-run companies that dominate Indian business have been quick to tap emerging market opportunities, but concerns remain over governance standards, Moody's said yesterday.
Seventeen of the 30 companies on the Mumbai stock exchange's main Sensex index are family-controlled, signaling their powerful hold on the economy, the US-based credit assessor said in a study it conducted with its Indian unit.
Moody's and local firm ICRA examined governance in 32 companies in 16 prominent family-controlled Indian businesses including conglomerates run by the Tata and Birla groups.
"Moody's has observed globally that family-controlled companies can face specific corporate governance challenges," it said, listing fewer checks and balances besides leadership transition risks and conflicting market strategies.
The report said that Indian family companies had responded well to the opportunities available in the fast-growing and liberalizing economy, which is expanding at an annual pace of 9 percent.
"Although Indian corporate governance practices are improving, this largely reflects regulation of listed companies, particularly regarding checks and balances such as composition of the board of directors and the operations of audit committees," said Chetan Modi, Moody's India director.
"Governance issues persist in areas not covered by regulation," Modi said.
He cited indications that "succession planning is not fully deliberated with independent directors."
"There is often insufficient transparency on ownership and control, related-party transactions and the group's overall financial position," Modi said.
The report also noted that despite regulations regarding independent board members, families retain significant control of listed companies, making it difficult to ascertain the "true independence" of directors.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to