|
Corporate governance in Pakistan is still in evolving stage. The State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) are the only regulatory authorities, who are constantly trying to enhance the level of corporate governance in Pakistan. In 1984, the government formed the Pakistan Institute of Corporate Governance (PICG) to promote good corporate governance practices. Poor corporate governance has been reported in a number of cases globally. Organizations like Enron, WorldCom, Inc., Barings (Sobhan and Warner, 2001; and Grant, 2003), HIH Insurance, One.Tel and Harris Scarfe (Denis, 2001; and Joh, 2003) are reported to have followed the same kind of corporate governance. In Pakistan, cases of poor corporate governance reported are Taj Company, Cresent Bank, Privatization of PTCL, Engro Foods, Mehran Bank and Khanani and Kalia Exchange Company. These cases are mostly associated with fraudulent practices, while other malpractices like non-compliance with law, exploitation of minority shareholders, nepotism, and irregularities in accounts were also involved. This paper examines the relationship between the failure of a local foreign exchange company, Khanani and Kalia International (Pvt.) Ltd. with the corporate governance practices followed in the organization.
|
