Case Analysis 1c5o73

c

The case gives an overview of the Bhopal gas tragedy. On December 3, 1984, poisonous gas leaked from Union Carbide India Limited (UCIL's) pesticide plant in Bhopal, which killed thousands of people. The case brings out the ethical issues involved in the disaster. It discusses in detail the reasons behind the disaster. The case discusses the role played by Union Carbide Corporation after the disaster, which seemed to be unethical. It also talks about the role of the GOI and Madhya Pradesh government in the disaster. The December 1984 Bhopal gas tragedy -the worst industrial disaster in history - has come a cropper as far as bringing those responsible to book. And at least 88 per cent of the people believe that the then prevailing system in India is to blame for letting the prime accused, Warren Anderson, then CEO of Union Carbide, go scot-free. The Union Carbide plant in Bhopal on December 3, 1984, leaked the toxic methyl isocyanate gas, killing over 15,000. Several thousands till date continue living with permanent defects, even as thousands more continue to be born with congenital defects years after the tragedy took place.

An online survey conducted by AZ Research indicated that a whopping 75 per cent of the people surveyed feel that the Bhopal gas tragedy verdict delivered by a Bhopal court on June 7 is "very unfair" (45.1%) and a "complete mockery" (29.9%) of justice; 550 people participated in the online poll. But 4.9 per cent feel that the verdict is fair while an other 10.4 per cent feel that it is "somewhat fair." Although 36 per cent of those surveyed did not know Warren Anderson, only 38 per cent feel that the Indian government will try to get Anderson extradited from the US to India to stand trial. They are hop eful that the government would be able to reopen the case to ensure justice. At least 68 per cent of those who participated in the poll feel that India's Central Bureau of Investigation (CBI) was under pressure to ensure an easy judgment for those respons ible for the tragedy. The survey finds 47 per cent of netizens believe life imprisonment for those held responsible would be an adequate penalty for a case of this magnitude, while 29 per cent wants nothing less than a death penalty. A fair penalty to be paid by the company per life lost should be Rs1 lakh, feel 31 per cent of the netizens, but 42 per cent feel no amount is enough for the lives lost in the tragedy caused due to negligence of company officials.



= ü Bhopal Gas Tragedy ü Reaction of the UCIL ü Role of government in granting permission ü Failure of safety measures ü Delay in Justice

The case examines the corporate governance issues at the India based IT services company, Satyam Computer Services Limited (Satyam). In mid-December 2008, Satyam announced acquisition of two companies - Maytas Properties and Maytas Infrastructure owned by the family of Satyam's founder and Chairman RamalingaRaju (Raju). Due to adverse reaction from institutional investors and the stock markets, the deal was withdrawn within 12 hours. Questions were raised on the corporate governance practices of Satyam with analysts and investors questioning the company's board on the reasons for giving consent for the acquisition as it was a related party transaction. After the deal was aborted, four of the prominent independent directors resigned from the board of the company. In early January 2009, Raju revealed that the revenue and profit figures of Satyam had been inflated for past several years. The revelation further deepened concerns about poor corporate governance practices at the company. The case describes the corporate governance structure at Satyam, its code of conduct, roles and responsibilities of different committees under the board, whistle blower policy etc. The resignation followed the announcement the previous day by B. RamalingaRaju (Raju), Founder and Chairman of India's fourth largest IT services company, Satyam Computer Services Limited (Satyam), that the company had been inflating the revenue and profit figures for past several years. In his resignation letter, Rao, who had recently resigned as independent director on the Satyam board. Another independent director, Mangalam Srinivasan8 (Srinivasan), had resigned from the Satyam board a few days earlier, on December 25. The resignations of these directors were the result of an aborted deal by Satyam to acquire two companies run by Raju's sons, Maytas Properties Pvt. Ltd (Maytas Properties) and Maytas Infrastructure Limited (Maytas Infra) for US$ 1.6 billion.Satyam's board of directors had given its consent for the acquisition. However, when the acquisition was announced publicly, it received flak from the investor community



= ü Study the corporate governance structure that existed at Satyam Computers. ü Appreciate the importance of Code of Conduct and Whistle -blower policy of a company. ü Examine the roles and responsibilities of a company's board and independent directors. ü Critically analyse the instances where the independent directors failed to fulfil their responsibilities. ü Understand the limitations of independent directors in Satyam's case.