Rahul Bajaj underlines the need for clean corporate governance if a company has to retain the trust of its customers and shareholders
"If the top management, the chairman or chief executive officer of the company is downright corrupt then corporate governance is not possible," says Rahul Bajaj, chairman of Bajaj Auto Limited. He was speaking at the "Governance Series" organised by the Confederation on Indian Industry (CII) on Tuesday.
Mr Bajaj spoke at length on various aspects of corporate governance in India and the role of an independent director.
According to Mr Bajaj, if the culture of the company's board is not correct, but is tainted by corruption, then customers and shareholders would leave the company. He said that excessive regulation affects those who run an honest business, rather than punishing the fraudsters and the crooks who will find a way to commit fraud despite regulation.
Speaking on the role of independent directors in a company, Mr Bajaj underlined that an independent director should not be on the board of more than dozen of companies, as only then would he be able to do justice. He further said that "independent directors should be able to decide if they want to be led or want to lead."
In his speech Mr Bajaj touched on tenure, liability, remuneration and the panel of independent directors. He said, "The panel of independent directors as maintained by the ministry is fine as far as they don't tell me to pick my independent director from your panel. It would be independent of me and not of you."
A question was poised to Mr Bajaj as to how independent directors would survive in the 'shoot-the-messenger/ whistleblower' regime and to this he said that "it will only succeed if he has the confidence in the mechanism created. Most of the companies have the policy to support them."
Mr Bajaj also made some general remarks on the Indian corporate sector, saying there is much scope for growth and to compete with big giant companies. Much more research and development is needed, in order to sustain and grow, he pointed out.
Mr Bajaj said India Inc is growing and there has to be a certain amount of regulation, but at the same time there has to be confidence in good chairmen and CEOs.
"We have to have some regulations, but let entrepreneurship and innovation flourish. Let us trust that the majority of chairmen and CEOs are good, not just inherently, but because their wealth and reputation depends on how well they and the company do. Let's have faith in them and then have minimal regulation to catch the crooks," he said.
Also sharing the stage at the event was Neville M Dumasia, executive director and head of governance, risk and compliance services, KPMG in India, who spoke on how to build effective boards, and Zia Mody, chairperson, CII M&A Forum and managing partner, AZB and Partners, who introduced Mr Bajaj.
Allaying fears of a slowdown, automakers have reported a steady growth in sales in January 2011. But the stock market does not seem as happy, as the BSE auto index fell 2.8% along with the rest of the market today
Auto sales are expected to slow down this year after the record 30% growth in 2010, but that isn't happening yet. From the sales figures announced by some of the major companies on Tuesday, it seems that last year's trend in sales has continued into January 2011. But two-wheeler makers have registered higher growth numbers than four-wheeler manufacturers during the first month of 2011.
Analysts expect that the hike in interest rates, rising fuel prices and vehicle costs could slow sales growth this year. Auto stocks were down today, in line with the overall drop in the market. Tata Motors was down nearly 7% to Rs1,068 on the Bombay Stock Exchange, whereas Maruti Suzuki lost about 1% to Rs1,240. Mahindra & Mahindra also lost 1% to Rs 705. TVS Motors was down nearly 5% to Rs51.70. The Bombay Stock Exchange (BSE) Auto Index fell 2.8% to 2138.7 points from 2228.7 points and the Sensex was down 1.6% to 18,022.
Tata Motors today reported a 15% growth in January sales at 75,423 units, compared to 65,478 units in the corresponding month last year. The company's total passenger vehicle sales in the domestic market for January 2011 was 30,212 units, which is a jump of 15% over the previous corresponding period, Tata Motors said in a statement.
Tata Motors' small car Nano, sold 6,703 units in January, a good 68% growth after struggling for some months to roll off the assembly lines. However, Tata Indica reported sales of 10,591 units, which is 8% lower compared to January 2010, the company said. The Indigo family recorded sales of 8,456 units, a rise of 17% over the corresponding month a year ago. Sales of Sumo, Safari, Aria and Venture range increased 26% to 4,462 units.
Utility vehicle maker Mahindra & Mahindra (M&M) reported a 22% increase in sales in January to 36,718 units. This included the sale of 20,500 tractors compared to 16,334 tractors sold in December 2010 and 2,100 exported y-o-y. Pawan Goenka , president, automotive and farm equipment business, M&M, said this was the highest sales for the company in any month and it would launch 8-10 new models launches during FY12.
Maruti Suzuki, the country's largest carmaker reported a 14.73% rise in sales to 1,09,743 units, in January 2011. Sales in the corresponding month last year was 95,649 units. Sales in the domestic market stood at 1,00,422 units in January 2011, a more than 23% increase from 81,087 units in the year-ago period.
Maruti Suzuki's exports in January 2011, however, fell by 36% from 14,562 units in January last year to 9,321 units, the company said. Sales of the M800 model also declined by 24% from 2,494 units in January last year to 1,876 units in January this year. Sales in the A2 segment that comprises Alto, WagonR, Estilo, Swift, A-Star and Ritz models, saw a 23% growth.
Chennai-based TVS Motor Company registered a 30% jump in January sales to 165,152 units. It sold 127,288 units in the month last year. Its two-wheeler sales increased by 29% in January, from 125,578 units in the year-ago period to 161,725 units.
Motorcycle sales of TVS Motors rose by 24% to 67,721 units from 54,698 units. Scooter sales grew by 60% to 40,736 units, as against 25,509 units in the period last year. Domestic two-wheeler sales in January stood at 142,227 units, up 30% from 109,504 units in the corresponding month in 2010.
Sales for Hero Honda Motors, India's largest motorcycle maker, rose by almost a fifth in January from a year earlier to 466,524 units. Hero Honda is a joint venture between the Hero group and Japan's Honda Motor Company. In December, the Hero group said it would buy Honda's 26% stake in the joint venture.
Two-wheeler maker Suzuki Motorcycle reported a 40% growth in January sales to 28,598 units compared to 20,448 units sold in the year-ago period. The India subsidiary of Suzuki Motor Corp of Japan, makes and sells scooters and motorcycles like Access 125, SlingShot, GS150R, Hayabusa 1300 and Bandit 1250S in its portfolio.
Toyota Kirloskar Motor (TKM), a joint venture between Toyota Motor Corp and the Kirloskar group has registered a growth of 53% in sales in January 2011, compared to the same period last year. It sold 9,185 units in January against 5,989 units in the corresponding month last year. The Etios, which was launched in December 2010, has seen an overwhelming response with more than 22,000 bookings received so far. In January, the company delivered 1651 units, it said.
Driven by demand for the hatchback Figo, Ford India reported a four-fold increase for January 2011 at 10,026 units, against 2,453 units sold over the same period last year.
General Motors said its sales also grew by 6% to 9,984 units in January 2011 from 9,421 units in January last year. "The increase in sales was primarily driven by the response to Chevrolet Beat, Spark and Cruze, introduction of the best-in-segment cars from the 300 series and increase in customer outreach through the distribution network," GM India vice-president P Balendran said.
SkodaAuto India, a fully owned subsidiary of SkodaAuto a.s., Czech Republic announced a sales growth of 51% for January 2011. SkodaAuto India’s total sales for January 2011 stood at 2,825 units against 1,881 units same month last year.
At the height of onion crisis around 20th and 21st December when the price of the bulb had peaked to Rs70-Rs85 a kg in the national capital, the government had ordered for import of the veggie to boost domestic availability
New Delhi: Though the government stopped subsidised sale of onions in the national capital from today with the softening of the kitchen staple prices, it said it is not in a hurry to lift ban on export of the veggie, reports PTI.
"Though the price of the onion has eased...but we have not reached the stage to restart export of the vegetable... we are not in any hurry," food minister KV Thomas told PTI.
With soaring of rates of onions that created a hue and cry across the country, the government had first decided to suspend export of the vegetable till mid-January, but later clamped an indefinite ban.
The minister of state with independent charge for food and consumer affairs said there was no need now for further contracting onion from other countries.
"Only previous contracted onions are imported now...there is no need for further shipment of the vegetable as the domestic supply of the crop has increased now," the minister said.
At the height of onion crisis around 20th and 21st December when the price of the bulb had peaked to Rs70-Rs85 a kg in the national capital, the government as a crisis-management step had ordered for import of the veggie to boost domestic availability.
Accordingly, state-run agencies PEC and STC had contracted 1,000 tonnes of onions from Pakistan in the first week of January.
The onions from the neighbouring country landed at Mundra port in Gujarat in phases from where it was ferried to Delhi by roads.
With softening of prices of onions to Rs 25-Rs30 a kg, the government yesterday decided to discontinue subsidised sale of the essential commodity through cooperatives like Mother Dairy, Nafed, NCCF and Kendriya Bhandar.
The government was giving 30% subsidy to cooperatives for vending onions at lower rates.