Corporate Governance: Crime & Punishment

Public opinion in the West since the arrest of Yukos’ Chief Executive in October 2003 has been consistently against the Russian Government particularly Putin who was the President then and is now the Prime Minister. The prospect of Putin returning to the Presidency after the next poll has added to the stridency of his detractors. The admiration for Yukos’ adoption of international standards on corporate governance still weighs with the supporters of the convicted CEO, who continues to be seen as a victim of political persecution directed against his efforts towards “Civilised Capitalism”. This paper delves into various aspects of Yukos’ management and seeks to examine the possible role of irregularities vis-à-vis the political ambitions of the chief executive in the dismemberment of the Russia's top company. There are parallels as well as dissimilarities among Yukos, Satyam and Samsung although pursuit of irregularities is a common factor. However, the South Korean Chaebol is placed differently in that punishments for corporate irregularities are in the form of charity, community service and support for the welfare initiatives of the Government. In India itself, Satyam is a rare instance where nearly everyone is agreed on hanging the dishonoured CEO by the nearest post and to make an example of him. Yet, business-related frauds and aberrations get either soft treatment or allowed to go unnoticed. This paper also takes a close look at the US record of corporate misconduct, the Enron scandal as well as the massive deception by leading financial players and negligent regulation boarding on collusion that added up to the meltdown.