Goldman Sachs Questions Corporate Governance of India Energy Giant
A Goldman Sachs report that raised corporate governance concerns about India’s largest oil and gas company by revenues and production has struck a nerve among investors in India.
On Thursday, investors unloaded shares in Oil and Natural Gas Corp. after the brokerage released a report that estimated the government had taken away almost $20 billion in cash over the last six years without consulting the company’s minority shareholders. That sum includes an estimated $6.5 billion for fiscal 2009, which ends March 31 this year. The government is ONGC’s biggest shareholder, holding 74.13%.
Oil and Natural Gas Corp.’s Bombay stock exchange listed shares fell as much as 4% and closed Thursday’s session down 1.90%. India’s benchmark index, the Sensex, closed down 2.94%. Market watchers said the shares had fallen on the back of the bearish report from Goldman Sachs.
The management and accounting at Indian companies has come under the spotlight in the wake of a scandal at outsourcer Satyam Computer Services Ltd. India’s Ministry of Corporate Affairs, which is spearheading the investigation into Satyam, has also ordered a probe into charges of accounting irregularities at Educomp Solutions Ltd, a New Delhi-based provider of software and content for educational institutions.
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