Hinduja Group gets a crash course in corporate governance

Why read this story?

Editor's note: “My dharma (duty) is to work, so that I can give.” The annual reports of Gulf Oil Lubricants India Ltd, Gulf Oil Corp Ltd, NXT Digital and Hinduja Global Solutions don’t fail to remind a reader about who said the above words: Parmanand Hinduja, founder of the Hinduja Group.  “Give”, for Parmanand, must have implied giving back some money for the greater good of society. But nearly half a century after his death, investors and analysts are now questioning if the maxim of some of the Hinduja-owned companies is to make money and then lend it to other promoter-run companies rather than plough it back into the business or even return some of it to shareholders. Earlier this month, the management of Hinduja Global Solutions, the Bengaluru-headquartered information technology (IT) services company, got a tongue-lashing from investors when it disclosed that it had given Rs 340 crore in short-term loans to three group companies in the January-March quarter. The reasoning trotted out by the management was that since it had ample cash, it gave the funds to the group companies …