HONG KONG: India has the most transparent companies while Chinese firms are the most opaque, according to a global watchdog’s survey released yesterday that assesses the efforts of companies in emerging markets to fight corruption. Transparency International said the report’s findings were “pathetic” and highlighted the urgent need for big multinational companies to do more to fight corruption.
The report covered 100 companies in 15 emerging-market countries that also included Brazil, Mexico and Russia. The overall score slipped since the last Transparency In Corporate Reporting survey in 2013, falling a fraction to 3.4 out of 10, with three quarters of companies scoring less than half. The Berlin-based watchdog warned that the failure of a vast majority of companies surveyed to operate transparently risks creating an environment for corruption to thrive both in their businesses and the countries where they operate.
Fighting global corruption
The weak scores are a big concern for global corruption fighting efforts, said Susan Cote-Freeman, Transparency’s head of business integrity. “All these companies including the Chinese ones are expanding in other geographies and they really have to raise the bar on their anticorruption and disclosure practices if we’re going to have a level playing field and if we’re going to really tackle this problem of corruption.” Companies were scored on three measures: anticorruption programs, the amount of information disclosed about subsidiaries, joint ventures and other holdings, and financial data released for operations in each country where it has business.
Thirty-seven Chinese companies were evaluated, making them the survey’s biggest group, but they had the weakest overall performance. The three companies that scored zero out of 10 were all Chinese: automaker Chery, appliance maker Galanz and auto parts maker Wanxiang Group. The list’s bottom 25 spots were also dominated by Chinese companies. “The very weak Chinese results stem from weak or non-existent anticorruption policies and procedures, or a clear failure to disclose them in line with international practice,” Transparency International said in a news release accompanying its report.
Spokespersons for Chery and Wanxiang did not immediately respond to a request for comment on the report. Galanz representatives could not be reached for comment. Indian firms, on the other hand, dominated the top spots. Telecom Company Bharti Airtel took first place with a score of 7.3 out of 10, followed by six units of conglomerate Tata and technology company Wipro.
One reason Indian companies came out on top is strict government requirements for financial disclosures, including operations in different countries. Another is that older companies such as Tata have been focusing on anticorruption efforts for “quite a long time,” said Cote-Freeman. Only one Chinese company, telecom gear maker ZTE, placed in the top 25. – AP