CORPORATE RESTRUCTURING: A PANACEA TO CORPORATE GOVERNANCE FLAWS

Abstract

India has seen multiple corporate scandals and financial crises involving several large corporations, some of which have been saved from sinking. However, scepticism in pinpointing the primary cause of such an incident is not new.  Following extensive research, it has been determined that the occurrence of such an unfavourable event in any corporate house triggered the intersection of corporate governance and corporate restructuring; thus, understanding the two aspects will improve effective risk management, as the two aspects appear to be supplementary and complementary to one another, particularly in reviving a collapsing corporate house. Traditionally, the two have been seen distinctively, particularly in terms of their relevance, applicability, and drawing interrelationships between them were never a concern. The paper will offer an idea of how corporate restructuring might be utilized to correct corporate governance issues in a company. In addition to elucidating the various broad spheres of corporate restructuring and their implications, the researcher will emphasize the importance of effective corporate governance, failure of which is attributed to be one of the major factors for a financial crisis or the ultimate collapse of a corporate house, despite its size, and it is at this point that corporate restructuring is used as a tool to rehabilitate the same. The researcher will rely on case studies while explaining how corporate restructuring is aptly used to overcome the flaws in corporate governance.