NAME : AVINASH S.

BAWANE
CLASS : LLB 3 YEARS 1ST SMESTER
ROLL NO : 17
COLLEGE : G H RAISONI LAW
COLLEGE
TOPIC : SHAREHOLDERS RIGHTS
AND PROTECTION OF
SHAREHOLDERS' RIGHTS
THROUGH CORPORATE
GOVERNANCE: A
COMPREHENSIVE ANALYSIS
Shareholders Rights and Protection of Shareholders' Rights through
Corporate Governance: A Comprehensive Analysis

1. Introduction:

A shareholder is any person or company that has the ownership of a

minimum of one share of the company. Shareholders also enjoy the profits
earned by the company's success. Being the owner of the company
shareholders has the power to elect directors and approve corporate actions.
The separation of ownership and control and dispersal of shareholders all
over the country make it of considerable importance to know the rights,
privileges and liabilities of the shareholders.

2. Objective:-

The objective of this research paper on shareholders' rights is to explore,

analyze, and provide insights into the various aspects and implications of
shareholders' rights within the context of corporate governance.

Corporate scams have become a worldwide phenomenon with large and far-
reaching consequences. Due to this Protecting shareholders' rights is crucial
for maintaining the integrity and fairness of a company's governance
structure.

3. Legal Framework:

The companies in India have to comply with various rules and regulation in
order to safeguard the Shareholders' Rights. the protection of shareholders'
rights is governed by various laws and regulatory bodies. The legal
framework for the protection of shareholders' rights includes statutes,
regulations, and guidelines designed to ensure transparency, accountability,
and fairness in corporate governance. Some of the key components of the
legal framework for the protection of shareholders' rights in India include:

a) Companies Act, 2013:

The Companies Act, 2013 is the primary legislation regulating

companies in India. It provides comprehensive provisions related to
the rights and responsibilities of shareholders, corporate governance,
and the conduct of board and general meetings. Several sections of
the Companies Act specifically address the protection of shareholders'
rights.

b) Securities and Exchange Board of India (SEBI):

SEBI is the regulatory authority for the securities market in India. It

issues guidelines and regulations to ensure the protection of investors,
 including shareholders. SEBI regulations cover various aspects, such
as disclosure requirements, insider trading, and corporate governance
practices.

c) Listing Obligations and Disclosure Requirements (LODR):

The SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015, outline the obligations of companies listed on stock
exchanges. These regulations include provisions related to the
protection of shareholders' rights, corporate governance, and
disclosure norms.

d) National Company Law Tribunal (NCLT) and National Company Law

Appellate Tribunal (NCLAT):

NCLT and NCLAT are quasi-judicial bodies that adjudicate corporate

matters, including those related to shareholders' rights. Shareholders
can approach these tribunals for redressal in case of disputes or
violations of their rights.

e) Securities Appellate Tribunal (SAT):

SAT is an appellate tribunal that hears appeals against decisions of

SEBI. Shareholders can approach SAT if they are dissatisfied with
SEBI's rulings or actions affecting their rights.

f) Investor Education and Protection Fund (IEPF):

The IEPF is established under the Companies Act to protect the

interests of investors, including shareholders. Unclaimed dividends
and shares are transferred to the IEPF, and shareholders can claim
their dues from the fund.

g) Insolvency and Bankruptcy Code (IBC):

The IBC provides a legal framework for the resolution of insolvency

and bankruptcy cases, including those involving companies.
Shareholders' rights are considered during insolvency proceedings,
and the process aims to protect their interests.

h) Minority Shareholders' Rights:

Various provisions in the Companies Act protect the rights of minority

shareholders, including provisions for class action suits and
protection against oppressive actions by the majority.

4. Types of Shareholders :
 Before analysis the shareholders right one must know the types of
shareholders:
a) Equity Shareholders:-
As the name suggests, they are owners of a company’s equity. These
shareholders enjoy voting rights over matters concerning the company.
Moreover, they can also exercise the aforementioned rights, including
filing class-action lawsuits against any matter that can harm the
company.

b) Preference shareholders :-
Preferred shareholders are prioritised over Equity Shareholders when
considering a company’s profit distribution. On the other hand, they
do not hold a right to vote in matters pertaining to a company’s
executive decisions. Also, preference shareholders are entitled to fixed
dividend rates, even if said company’s profitability is at stake.

Though both Equity Shareholders and Preference Shareholders see

their value increase with the positive performance of the company.
However, it is the Equity Shareholders that experiences higher capital
gains or losses.

5. Rights of shareholders-
The rights of shareholders may be broadly divided into three categories:
i. The rights of the individual shareholder
ii. The rights of the minority shareholders, and
iii. The rights of the majority shareholders

RIGHTS OF INDIVIDUAL SHAREHOLDERS:-

a) An individual shareholder is entitled to get copies of
1) the memorandum and articles of association,
2) trust deed securing issue of debentures,
3) register of members,
4) minutes of the proceedings of general meetings
5) register of contracts, companies and firms in which directors are
interested,
6) contract or board resolution appointing manager, managing
director, etc.
7) registers of loans to companies under the same management,
8) investments maintained under sections 372(9). 356, 358, 359 and
360.

The Companies Act further gives a shareholder the right to inspect

1) the register and index of members and debenture holders,

 2) annual returns,
3) registers of investments,
4) Register of charges, contracts, directors, directors' shareholdings,
5) Register of loans to companies under the same management,
6) Register of investments in shares of other companies
7) The minute books of general meetings.

However, a shareholder does not enjoy the right to inspect the books
of account. The reason being that the interests of the company may
suffer if important and vital information regarding the day-to- day
working of the company is made available to the shareholders who
may be competitors or may give out the information to rivals.

b) Right of Shareholders to Receive Notice of Meetings:

Notice of every meeting must be given to every shareholder either
personally or by post at his registered address in India or if he has no
registered address in India, to the address, if any, within India
supplied by him to the company for giving notices to him. A notice
calling a meeting must state the place, day and hour of the meeting
and the statement of the business to be transacted thereat.

The right of the individual shareholder to receive the notice of twenty

one days cannot be taken away by the majority of shareholders even
by passing a special resolution. Even if it could be proved that a
member would not have attended the meeting that will not excuse
the convener of the meeting from giving him proper notice.

A general meeting may be called by giving shorter notice if, in the

case of an Annual General Meeting, all the members entitled to
attend and vote agree to it in writing and in the case of other general
meetings only when members holding 95 per cent of the total voting
power agree to do so. The twenty one days length of notice has been
fixed to provide time to the shareholders to organise themselves and
canvass opinion on the agenda and resolutions to be considered at
the general meeting.

c) Voting Rights :-
Every member of a company limited by shares and holding any
equity share capital shall have a right to vote in respect of such
capital on every resolution placed before the company and his voting
right on a poll shall be proportionate to his share of the paid up
equity capital of the company. A member holding any preference
share capital shall have a right to vote only on resolutions which
directly affect the rights attached to preference shares.

Every equity shareholder has a right to vote upon such questions as

the company is legally competent to deal with even if he may have a
personal interest in the subject-matter opposed to or different from
the general or particular interests of the company. The shareholder's
vote is a right to property and prima facie may be exercised by a
shareholder as he thinks fit in his own interest.

If a shareholder's name is entered in the register of shareholders of

the company, he cannot be prevented from enjoying the right to vote
on the ground that his Dame has not been on the register for any
specified period before the date of voting. A company cannot by its
articles of association or otherwise impose a restriction that a
shareholder holding less than a minimum number of shares shall
not be entitled to vote. However, section 181 permits a company to
put restrictions on the exercise of the voting right on two grounds,
namely:
non-payment of calls, or
when the company has any right of lien and exercises it.
A private company not a subsidiary of a public company is exempted
from the operation of section 182 and can, therefore, put restrictions
on the exercise of voting rights of members in its articles of
association in addition to the above grounds.

 Right to Appoint Proxy :-

Section 176 gives a very important right to a shareholder, who is
entitled to attend and vote at a meeting of the company, to appoint
another person (whether a member or not) as his proxy to attend
and vote instead of himself. It is not convenient for a shareholder
generally to attend the meetings of a company situated at a far
away place. But through the system of proxy he can make use of
his right to vote by appointing a man of his choice as his proxy.

 Demand for Poll :-

A poll may be demanded under section 179 by the following
persons:
In the case of a public company, by at least five members having
the right to vote on the resolution and present in person or by
proxy'
In the case of private company, by one member having the right to
vote on the resolution and present in person or by proxy if not more
 than seven members are personally present, and by two members
present in person or by proxy if more than seven members are
personally present.
By any member or members present in person or by proxy and
having not less than one-tenth of the total voting power in respect of
the resolution, or.
By any member or members present in person or by proxy and
holding shares in the company conferring a right to vote on the
resolution being shares on which an aggregate sum has been paid
which is not less than one-tenth of the total sum paid up on all the
shares conferring that right.

 Right to Speak at a Meeting :-

A shareholder has a right to be heard at a meeting in reasonable
terms and for a reasonable time. A company meeting is a privileged
occasion and statements made thereat by a shareholder will not
make him liable for defamation in the absence of malice.

d) Right of Appeal Against Refusal to Register Transfer of Shares :-

If a company refuses to register any transfer of shares or transmission
of right, whether in pursuance of any power under its articles or
otherwise, it shall within two months from the ,date on which the
instrument of transfer or the intimation of such transmission as the
case may be, was delivered to the company, send notices of the refusal
to the transferee and the transferor or to the persons giving intimation
of such transmission as the case may be.

Section 111 gives the right to the transferor and the transferee or to the
persons who gave intimation of the transmission by operation of law, as
the case may be. where the company is a public company, or private
company which is a subsidiary of a public company, to appeal to the
Government against any refusal of the company to register the transfer
or transmission or against failure on the part of the company to send
notices of its refusal as mentioned above.

The transferability of a share is a very important right to the

shareholder of a public company as it adds to its negotiability and
hence the right of appeal to the Government is an important safeguard
against capricious and malafide refusal to register the transfer of
shares. The alternative remedy against refusal to register the shares is
to apply to the Court for rectification of the members' register."
 It was held by the Supreme Court in Harinagar Sligar Mills Ltd., v.
Shyam Sunder Jhunjhunwala, that in an appeal under section 111(3)
the dispute relates to the civil rights and in deciding the appeal the
Government acts as a tribunal and not as an executive body.

It has been held further in Arjan Singh vs Pallipat Woollen and General
Mills Co. Ltd., that section 155 does not purport to confer over-riding
powers on the Court and hence the Court will not entertain a petition
where the aggrieved shareholder has availed of the alternative remedy
under section 111 of the Act. However, an order passed by the
Government under section 111 is appealable to the Supreme Court by
special leave under article 136 of the Constitution.

e) Right to Apply to the Government to Call Annual General Meeting:-

If default is made in holding an Annual General Meeting in accordance
with section 161, any member may apply to the Government under
section 167, and the Government may give directions for calling,
holding and conducting the meeting.

The fact that the annual accounts of the company were not ready
cannot be an excuse for not calling the Annual General Meeting." For
failure to call the Annual General Meeting under section 168, the guilty
directors can be held liable under section 210(5), in addition to their
being convicted, for default in not placing before the Annual General
Meeting the balance sheet and profit and loss account for the year
concerned. An extraordinary general meeting convened in accordance
with the requisition of the shareholders cannot be considered to be an
annual general meeting.

Any member of the company who is entitled to vote at the meeting has
a right to apply to the Court under section 186 to direct the holding of a
meeting other than an Annual General Meeting, if for any reasons it is
contended that it is impracticable to hold the meeting. The mere fact
that a member owes to the company a sum of money or that the
company has a lien on his shares for his debts and engagements does
not deprive the member of his right to be present at any general
meeting or to vote therein and he can therefore present an application
to the Court under section 186 for an order directing the calling of a
meeting."

f) Right to Convene Extraordinary General Meeting :-

A certain specified number of shareholders enjoy the right to convene
an extraordinary general meeting of the company under section 169 of
 the Act. It is obligatory on the part of the directors to call an
extraordinary general meeting on the valid requisition of holders of not
less than one-tenth of the equity capital carrying voting rights.

If the directors fail to call an extraordinary meeting within twenty one

days from the date of the deposit of a valid requisition in regard to any
matters for consideration on a day not later than 45 days from the date
of deposit of the requisition, the meeting may be called by the
requisitionists themselves or by such of the requisitionists as represent
either a majority in value of the paid-up share capital held by all of
them or not less than one-tenth of such of the paid-up share capital
carrying a voting right, whichever is less.

If the registered office of the company is locked up, the requisitionists

can hold the meeting at some other place 40 The requisitionists are
entitled to realise reasonable expenses incurred by them in calling such
meeting and the company shall recover the same from the fees or other
remuneration of the defaulting directors.

g) Legal Actions By Shareholders :-

Although a shareholder is bound to accept the decision of the majority
by virtue of his contract with the company and other members, the
individual member has got certain right such as the right to vote at the
meeting, to speak at the meeting, to move an amendment to a
resolution, to appoint proxy, to receive and sue for dividends which
have been declared and such rights cannot be taken away by the
majority action of the shareholders.

h) Right to Get Company's Affairs Investigated :-

A specified number of shareholders have got the right to get the affairs
of the company investigated through the Government under section
235 of the Act. In the case of a company having a share capital, two
hundred members or members holding not less than one-tenth of the
total voting power, or, in the case of a company not having a share
capital, one-fifth number of persons on the company's register of
members may request the Government to appoint inspector or
inspectors to investigate the affairs of the company.

Such minority shareholders will, however, have to satisfy the

Government that they have good reasons for requiring the investigation.
Since the shareholders have got no right to inspect the books of
account, it is difficult for them to furnish satisfactory evidence in
support of their petition. But if prima facie the Government feels that
 the allegations have some force, they may collect facts before ordering
investigation by surprise inspection of books of account under section
209 of the Act without any stigma of investigation harmful to the
company.

It needs to be considered whether it should be made mandatory on the

part of the Government to order investigation if requested by over 200
members or holders of twenty per cent of the issued shares unless it
considers that the application is vexatious, and made out of malice.
However, the wide powers given to the Government under section 237
of the Act are a great, safeguard to the shareholders against abuses
and malpractices by the management.

ii) RIGHTS OF MINORITY SHAREHOLDERS

The fundamental principle defining operation of shareholders democracy
is that the rule of majority shall prevail. However, it is also necessary to
ensure that this power of the majority is placed within reasonable bounds
and does not result in oppression of the minority and mis-management of
the company. The minority interests, therefore, have to be given a voice to
make their opinions known at the decision making levels. The law should
provide for such a mechanism. If necessary, in cases where minority has
been unfairly treated in violation of the law, the avenue to approach an
appropriate body for protecting their interests and those of the company
should be provided for. The law must balance the need for effective
decision making on corporate matters on the basis of consensus without
permitting persons in control of the company, i.e., the majority, to stifle
action for redressal arising out of their own wrong doing.

Who is Minority Shareholder :-

At present, in case of a company having share capital, not less than 100
members or not less than 1/10th of total number of members, whichever
is less or any member or members holding not less than 1/10th of issued
share capital have the right to apply to CLB/NCLT in case of oppression
and mismanagement. In case of companies not having share capital, not
less than 1/5th of total number of members have the right to apply.

To reflect the interest of the “Minority”, a 10% criteria in case of

companies having share capital and a 20% criteria in the case of other
companies is provided for in the existing Act. In Section 395 of the Act,
the dissenting shareholders have been put at the limit of 10% of shares.
Thus Minority could be defined as holding not more than 10% shares for
the limited purpose of agitating their rights before the appropriate forum.
a) Right to Appoint Small Shareholder Director:

Under the provisions of Section 151 of the Companies Act, 2013 in the
case of a listed company the small shareholders of the company can
appoint a director named a small shareholder director who acts as
such to safeguard, promote and represent the interests of the small
shareholders of the company. Provided that, such a director is
appointed in the capacity of an independent director in a company for
a prescribed period of time.

b) Protection against Oppression and Mismanagement-

These are two terms used to describe the unjust or unfair use of
authority in a company.

Oppression is when the matters of the company are decided unfairly or

in a manner unfair to any member, Examples of oppression include:
 Depriving a member of the dividends
 Issue of further shares only benefitting a section of
shareholders
 Not maintaining the statutory record of the company
 Not calling the general meeting
 Keeping the shareholders in the dark.

While mismanagement is when the matter of the company is done in a

manner prejudicial to the interests of any member. Mismanagement
includes:

 Handling of the company’s bank account by an unauthorized

person
 Violation of the memorandum
 Serious issues between the directors
 Not taking action against illegal activities

c) Protecting Minority Shareholder’s Rights:

The National Company Law Tribunal (NCLT)[1] is a special tribunal
established by the Companies Act 2013 to defend the interests of
minority shareholders. The Supreme Court established this body to
address matters involving the firm. Sections 241 to 246 deal with the
company’s unfair prejudice, oppression, and mismanagement.
1) Section 241: Any member of the company may bring a claim
against the corporation under Section 241 of the Act if it is
determined that:
 The company’s affairs are being conducted in a way that is
prejudicial to the interests of any of its members.
 If there are changes in the interests of any creditors, debenture
holders, or shareholders, or in the company’s management,
being prejudicial to only a specific class of members implies
benefiting only a single set of individuals.
 The central government has the right to petition directly to the
tribunal if it believes that a firm is acting improperly internally
and compromising the interests of its members.
2) Section 242: If a petition is submitted in accordance with section
241, section 242 describes the tribunal’s authority. The following
authorities belong to the tribunal:

 If the court determines that the company’s matters or affairs are

being conducted in an unfairly discriminatory manner or in a
way that is oppressive to any member of the company, the court
may order the company to stop practising such discrimination
and oppression. Winding up the company would not be
recommended because it would be unfair to the other members.
 The company’s rules may be provided for or amended by the
tribunal without any prejudice. They can even direct
shareholders to buy the other shareholder’s shares.
 To address the issue of oppression and mismanagement, it is
possible to lower the company’s share capital and impose
limitations on the allocation and transfer processes.
 If the tribunal determines that the directors or managing
directors have received improper benefits, it may dismiss them.

iii) RIGHT OF MAJORITY SHAREHOLDERS TO REMOVE

DIRECTORS :-
The shareholders have a right to remove by an ordinary resolution,
a director with whom they are dissatisfied before the expiry of the
period of his office, except in the following cases:
 Where a director has been appointed by the Government in
pursuance of section 408.
 In the case of a private company, if the director holds office for
life on April I, 1952.
 Where the company has availed itself of the option given to it
under section 265 to appoint not less than two-third of the total
 number of directors according to the principle of proportional
representation.

Exercise of Power by Shareholders in General Meeting

The board of directors is usually vested with all the powers of
management by the articles of association of the company. Section
293 provides certain restrictions on such powers. The directors
cannot, except with the consent of the company in general meeting,
sell, lease or otherwise dispose of the whole or substantially the whole
ofthe undertaking of the company or, where the company owns more
than one undertaking, the whole or substantially the whole of any
such undertaking; remit or give time for the repayment of any debt
due from a director; invest otherwise than in trust securities the
amount of compensation received by the company in respect of
compulsory acquisition; borrow money exceeding the paid up capital
and tree reserves of the company; and contribute to charitable and
other funds not directly relating to the business of the company or the
welfare of its employees any amount exceeding twenty five thousand
rupees or five per cent of its average net profits during the three
financial years immediately preceding, whichever is greater.

If the shareholders want to retain more powers in their hands, they

can amend the articles and usurp more powers for themselves, The
power of the directors to recommend a dividend or to declare an
interim dividend is exclusive and the members cannot resolve that
larger dividends shall be paid to them than those decided by the
directors.

The Controlling Shareholders

A ninety per cent majority of the shareholders is in a position to
compel the ten per cent dissentient shareholders to sell out their
shares. The majority of shareholders who control the board of
directors can also compel the minority shareholders to sell their
shareholdings by not declaring dividends in spite of good profits in the
company. It is therefore necessary to consider how the controlling
shareholders may be made to act in the bona fide interest of the
company as well as the other minority shareholders.

The controlling shareholders unlike the directors do not stand in any

fiduciary relationship and are therefore not required to act in good
faith in the interest of others. The controlling shareholders, it appears,
are not liable to account to the other shareholders for the larger price
obtained by them on sale of the block of their shares than that which
the other shareholders have obtained in a take-over bid, although
there are provisions in the Companies Act for making the directors
responsible for it.

OTHER LIABILITIES FOR WRONGFULS ACTS AGAINST SHARE

HOLDERS:-

 Civil Liability for Misstatement in Prospectus

The Civil liability for misstatement in prospectus has been
enumerated under Section 35 of the Companies Act, 2013. If a person
has subscribed for the securities of a company based on any
misleading statement is Prospectus, or the inclusion or omission of
any matter in Prospectus and there exist any loss or damage as a
result, the company and the following persons will be liable to
compensate each person who has suffered such loss or damage.

The persons who will be considered to be liable for any misstatement

in Prospectus along with the company are:
a. At the time of issuance of Prospectus, the Director of the company;
b. Has authorized himself to be named as the director of the
company and is named in the prospectus, or has agreed to become
the director of the company, either immediately or after an interval
of time;
c. Company’s promoter;
d. Has authorized the issuance of prospectus; and
e. An expert who isn’t or not has been involved or interested in the
company’s formation, promotion or management and has given his
written consent to the issue of prospectus, which he has not
withdrawn before the delivery of a copy of the prospectus to the
Registrar for registration, and a statement to that effect shall be
included in the prospectus.
f. The measure of damages or compensation for the loss that has
arisen because of untrue statement or omission is exactly the
difference between the value which the shares would have had but
because of such untrue statement or omission and the true value
of shares at that moment. The gap between the purchase price and
the real value of shares is a crucial element in the determination of
the exact number of damages to be awarded to compensate a
person who has been fraudulently induced to purchase shares.
After the fraud has been exposed and the market has settled, it
may be appropriate to utilize the later market price of the shares.
In accordance with Article 113 of the Limitation Act, 1963, a
complaint for shareholder damage must be filed within three
years.
In the case of R. v. Lord Kylsant, in the prospectus, a table
showed that the company had paid dividends ranging from 8 per
cent to 10 per cent in the previous years, with the exception of two
years wherein no dividend was paid. The statement appeared to
show that the company was in good financial shape, but the truth
was that the company had suffered significant trading losses in
the seven years leading up to the prospectus date, and the
dividends had been paid from the funds earned during the
unusual period of war, rather than the current earnings. The
Prospectus was held to be false because there was an omission of
the fact which was pertinent to appreciate the statements made in
the prospectus.

 Criminal Liability for Misrepresentation in Prospectus

Misrepresentation in a prospectus is punishable under Section 63
of the Companies Act, 1956. Anyone who authorizes the
distribution of a prospectus that contains an inaccurate statement
faces a maximum sentence up to a term which may extend to two
years imprisonment, or with fine which may extend up to INR
50,000/- or both.
According to Section 34 of the Companies Act, 2013, where a
prospectus contains any statement which is untrue or is
misleading in any form or way or context in which it is included or
where exists any inclusion or omission of any matter which is
likely to mislead, in such case, any person who authorizes the
issue to such prospectus shall be punished under the above stated
section with an imprisonment for a term which may not be less
than 6 month and which may extend up to 10 years and the
culprit shall also be liable to fine which shall not be less than the
actual amount of fraud but which may further extend to triple the
amount involved in fraud.

As a result, imposing liability on those involved in the prospectus

preparation is a way to regulate the initial public offering. The
regulation is necessary to assure the correctness, adequacy and
timelines of all the material information pertaining to both the
prospectus and the issuing corporation in question.

 Advertisement of Prospectus :-
In accordance with section 58A of the Companies Act, 1956, as
amended by the Companies Act, 1974, deposit shall be not be
 solicited lacking first publishing an advertisement, there should be
an advertisement with a statement reciting the company’s financial
situation and asserting that the company is not in default in
repaying any payment or the interest imposed on such deposit.
The provision for prospectus advertisement is involved in Section
30 of the Companies Act of 2013. It is vital to state the contents of
a company’s memorandum as to the object in any advertisement of
a prospectus that is published in any fashion, the members
Liabilities and the company’s share capital as well as the names of
the memorandum signatories and the quantity of shares they
subscribe for and the company’s capital structure.

CONCLUSION :-
During the latter decade of the twentieth century the notion of
corporate governance obtained traction in India as it did in other
nations across the world. It has also become a catchword, India like
the rest of the globe was obligatory to embrace outstanding
governance for the determination of practice and international
accounting rules and disclosures protection to safety of investors. This
state is not exceptional to India; it is a narrative that can be found in
all corporate laws across the world. Likewise, despite the court’s best
efforts to oversee corporate governance and safety measure
shareholders interest such efforts were unsatisfactory. Accepting the
insufficiency of governing measures, the legislature attempted to
supplement corporation law and to suggestion other means and ways
of regulating and protecting stakeholders by appointing a number of
committees in India and overseas. In India as well as outside India the
corporate scandals giving alarming signal to the stakeholder or
shareholder and to the government. These scandals lead to the non-
working of the directors and mangers of the company which the
company suffers and noncompliance with the law of the land. There is
no disclosure of information and transference and keeping the
shareholder above all the personal interest is most common in almost
all the countries nowadays.