Dr. P.V. Viswanath |
Courses/ Articles | ||
Corporate governance: |
||
Apr 27th 2013 | From the print edition |
||
EMPIRE-BUILDERS of old claimed they were spreading Britain’s civilising influence. Similar explanations were offered when the London Stock Exchange (LSE) started welcoming mining firms from emerging economies. Listing in London would spur them to adopt British corporate-governance standards, investors were told. The firms would find it easier to raise the vast amounts of capital needed to develop big mines. And punters would be able to bet on a booming industry without worrying about the weaker protections for investors in the wilder parts of the world. Alas, it didn’t work that way, as the latest upheavals at two London-listed firms show. Shares in Bumi, a London-listed firm that owns stakes in Indonesian coal mines, were suspended on April 22nd. This followed the widening of a probe into questionable financial arrangements. One of Bumi’s co-founders, Nat Rothschild, a British financier, accuses his Indonesian partners, the politically powerful Bakrie family, of misusing funds. (Some of Mr Rothschild’s relatives are shareholders of The Economist.) Issues:
|