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Indian Industry Group Assocham wants to muzzle Independent Unbiased Research on its Members rather than Improve Corporate Governance and Reduce Corruption

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India’s business houses are hardly the paragons of virtue as everyone knows. Many of the business houses are known to siphon money from the public companies to their private coffers through various legal and illegal means. It is difficult to find a company in India which has good corporate governance and the trust of investors. Investing in a mid cap and even sometimes a large cap company can be dangerous because of problems associated with corporate governance and information disclosure. Even after the fraud or malfeasance is proved, promoters and big stock market players can get away with nominal punishment like not operating in the market for X number of year. Unless the scandal turns out to be a huge one, life goes on as usual without any punishment or prosecution. Here are some of the common schemes used by companies to defraud investors:

  1. Vanishing Companies – Small companies simply vanish from the stock market. They stop reporting results to the market and the investors have no way to exit as their stock stops trading as the exchange bans the company from trading. You are literally left holding scraps of paper.
  2. Collusion between Promoters of Companies and Big Brokers – There have been many instances when promoters and big brokers manipulate the market to ratchet up the prices of stocks with no fundamentals to speak of .The instances of the “pump and dump” are too many to enumerate.
  3. Accounting Scandals – While the “Satyam Scandal” is the biggest one , PWC in a recent report estimated that a very high percentage of companies resorted to accounting gimmicks. Read Satyam Computer Services scandal
  4. Incestuous Dealings between private and public companies in the same group – Most of the Indian family groups have a labyrinthine maze of company holdings. Most of the dealings done between these companies are to the benefit of the promoter at the expense of minority shareholders.
  5. Tax Frauds – Tax Frauds are dime and dozen. They are frequent and don’t even raise much of an eyebrow. Get frequently entangled in the Indian judicial system for years.
  6. News Frauds – Somebody circulates a fraudulent letter through major news media. Stock price goes up, people in the know sell out to investors who believe authoritative news media. Read  Pyramid Saimira scam: How our business media was taken for a ride

Assocham which is India’s premier industry association however does not want to improve the corporate governance of its members. Rather it wants independent equity research houses to stop publishing the damning truth about its members. Note a Canadian research house Veritas has come out with scathing reports on top business groups like DLF, Indiabulls, Reliance and ADAG. Rather than introspect and try to improve the situation, Assocham wants to muzzle the independent unbiased voices. All the Indian and foreign brokerages and research firms are totally compromised and are unable to come out with truthful analysis.


In view of some recent ‘sensational’ analyst reports, the Associated Chambers of Commerce and Industry (Assocham) in India has asked the market regulator SEBI to investigate these reports and take further steps to avoid recurrence of such instances.

Referring to the reports, Assocham, said these ‘reckless’ reports create panic in the market and cause ‘immense damage’ to the securities markets.

Assocham feels that there have been some “serious regulatory gaps” in dealing with these “meddlers” who try to fudge the market by rigging share prices of certain companies.

Read About other Bad Corporate Governance Stories in India:


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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