ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Too Many Wise Monkeys

the Shareholder", June 12, pp 1161- 62) a Correspondent had pointed out the need to afford better protection to those who make deposits with com- panies. The complete inadequacy of the existing safeguards, formal and informal, in this regard is brought out by the case of Shamsher Sterling Cable Corporation. This public limited company with a paid-up capital of Rs 100 lakhs and deposits from the public, at the latest reckoning, of Rs 60 lakhs has, in a matter of a few years, reached a state of near-bankruptcy. Not only the statutory authorities like the Registrar of Companies and the Company Law Board, but even the financial institutions with a stake in the company and the company's Auditors and independent Directors, who are supposedly the watch-dogs of public interest, have done little to avert the disaster or even to warn ordinary shareholders and deposit-holders about the real state of the company's affairs. The result of this conspiracy of silence was that between the end of December 1968 and mid-1971, during which period the financial position of the company deteriorated sharply, the pub- lie was persuaded to increase its deposits with the company by Rs 46 lakhs.

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