Putting the spotlight back on governance practices in private equity

The fraud at Punjab National Bank (PNB) reignited the question whether the ownership of public sector banks makes them harder to govern and hence more vulnerable to fraud. While the challenge is more systemic in the banking sector, the debate on the link between ownership structure, governance and performance is a critical one for the Indian private equity sector as well, where the bulk of private equity investors have minority stakes in their investee companies and the companies tend to be run by promoter families that are notorious for controlling their businesses closely.