Introduction

Corporate India often feels like a long boulevard of impressive mansions. From the pavement every structure is immaculate: flood, lit façades, trimmed lawns, imported cars glinting in the porch. When you ring the bell, however, you sometimes discover rooms in disarray, unpaid contractors at the kitchen door, and the owner already on the next flight out. Each high, profile collapse, Kingfisher, Jet Airways, IL&FS (Infrastructure Leasing & Financial Services), and now Byju’s, has invited regulators, courts and an increasingly skeptical public to step past the gates and inspect the debris. The immediate clean, up usually portrays: laws are hurried through Parliament, press conferences trumpet zero, tolerance, and banks promise stringent appraisals. Yet the deeper question remains unresolved. Are these episodes pushing India toward a mature culture of corporate accountability, or have companies merely learnt to curate smarter press releases while carrying on much as before?

Kingfisher Airlines and the Fugitive Economic Offenders Turn

Vijay Mallya’s rise and fall remains the archetype. In the mid, 2000s the liquor baron’s Kingfisher Airlines embodied India’s aspirational self, image: red, uniformed cabin crew, Formula One sponsorships, after, parties that blended Bollywood glamour with Davos deal, making. Beneath the fizz sat a balance sheet drowning in short, term bank debt and chronic operating losses. By 2012 the airline had defaulted on statutory dues and salaries; by early 2013 the Directorate General of Civil Aviation had suspended its license. State, owned banks, lured by the promoter’s brand and an economy in full throttle, had rolled over loans worth more than nine thousand crore rupees. When Mallya quietly left for the United Kingdom in March 2016, the public learnt that personal guarantees were riddled with loopholes, collateral valuations were optimistic, and consortium monitoring had been perfunctory. The political backlash was fierce. Two years later Parliament enacted the Fugitive Economic Offenders Act, empowering special courts to seize domestic assets of anyone who owed more than one hundred crore and refused to return to face criminal trial. The Reserve Bank followed with tighter provisioning rules and the finance ministry ordered public banks to document credit decisions more rigorously. All of this, however, occurred only after thousands of jobs vanished and taxpayers were saddled with haircuts that restructurings under the Insolvency and Bankruptcy Code would later crystallize. The episode proved that Indian law can move quickly once outrage peaks; it did not show that red flags are heeded in real time.

III. Jet Airways and IL&FS: Rating Agencies, Auditors, and Reactive Correctives
The narrative repeated itself, with different characters, in 2018 and 2019. Jet Airways, the pride of liberalization, era civil aviation, had expanded too fast, financed expensive aircraft through dollar, denominated leases, and pursued network partnerships it could not afford. For years credit rating agencies, maintained investment, grade opinions even as lessors began demanding early payments. When fuel costs spiked and the rupee weakened, the cash buffer evaporated almost overnight. Lenders refused additional support unless founder Naresh Goyal relinquished control; he hesitated, the fleet was grounded, and another iconic brand headed to bankruptcy court, leaving employees unpaid and passengers stranded. Around the same time IL&FS, a labyrinthine infrastructure lender with hundreds of subsidiaries, defaulted on its commercial paper. Government officials initially described the default as a “liquidity blip”; within weeks it was clear that a ninety, thousand, crore mountain of obligations could not be rolled over because many underlying projects lacked viable cash flows. Auditors had signed clean opinions, rating agencies had slapped triple, A grades on group entities, and mutual funds had parked retired teachers’ savings in what they considered the safest of paper. Shock forced swift institutional reaction. SEBI revamped its rules on rating agencies, requiring more granular disclosure of issuer payments and sharper early, warning triggers. The National Financial Reporting Authority, only recently operational, began disciplinary proceedings against audit partners who had green, lighted IL&FS accounts. Yet, once again, the horse had bolted; reforms chased, rather than prevented, spectacular failure.

IV. Byju’s: Unicorn Vulnerabilities and the Compliance Perimeter
If Mallya embodied old, school flamboyance and Jet plus IL&FS highlighted entrenched gatekeeper complacency, Byju Raveendran’s ed, tech empire demonstrates the vulnerabilities of the twenty, first, century unicorn. Byju’s started in a Bangalore living room, riding smartphone penetration and parental anxiety into a valuation that briefly touched twenty, two billion dollars. The company bought foreign test, prep firms, funded cricket sponsorships, and promised to democratize learning. Behind the marketing sheen, financial statements began arriving late, employee counts seesawed with each acquisition, and investor memos whispered about aggressive revenue recognition. Deloitte, the statutory auditor, resigned in 2023, citing an inability to access underlying data, while board representatives of Prosus, Sequoia and the Chan Zuckerberg Initiative walked out within weeks. Losses of more than four and a half thousand crore rupees for financial year 2021 eventually emerged, a twenty, fold spike from the previous year. The Enforcement Directorate raided premises for alleged foreign, exchange violations; the Ministry of Corporate Affairs opened an inspection, noting weaknesses in internal controls though stopping short of alleging fraud. The puzzle here is novel. Byju’s is not listed, so SEBI’s elaborate continuous, disclosure regime does not apply. The Companies Act offers fewer real, time reporting obligations for private limited firms, even those that employ tens of thousands and handle global capital. In effect, a business can acquire systemic importance long before the regulatory perimeter tightens.

V. The Statutory Scaffold versus Enforcement Reality

These stories force us to parse what “corporate accountability” really means in the Indian context. On paper the country boasts one of the most sophisticated frameworks in the Global South. The Companies Act of 2013 imposes fiduciary duties on directors, mandates independent board seats, requires constitution of audit, nomination and risk committees, and threatens civil and criminal liability for false statements. SEBI’s Listing Obligations and Disclosure Requirements mesh with the Act to demand quarterly results, immediate reporting of material events, and prior shareholder approval for large related, party transactions. The Insolvency and Bankruptcy Code of 2016 reshaped creditor rights by promising resolution within 330 days and by empowering creditors, not debtors, to steer control once default occurs. Parliament even inserted a corporate social responsibility obligation, the first such statutory mandate worldwide. Taken together, the architecture seems formidable.

Yet the chasm between text and practice is wide. The National Company Law Tribunal, which adjudicates insolvency, is clogged with half, staffed benches; time, bound resolutions routinely overrun the statutory deadline, eroding recovery values. The Serious Fraud Investigation Office, the Enforcement Directorate and SEBI often open parallel investigations, but coordination among them can be patchy, leading to sequential summonses that freeze managerial attention without necessarily accelerating truth, finding. Audit regulators face resource constraints, and the professional firms they police control lucrative public, sector mandates, complicating the enforcement calculus. Bank board’s remain vulnerable to informal pressure, political, bureaucratic, or simply the cultural bias that treating a famous promoter harshly might jeopardize future business. The result is a pattern of compliance by hindsight: once a default becomes front, page news, every stakeholder behaves sternly; beforehand, skepticism is in short supply.

VI. Cultural Dimensions: From Jugaad to Governance

Culture weighs as heavily as statutes. Indian capitalism grew up in an atmosphere of jugaad, the talent for improvised fixes and personal relationships that can navigate ambiguous rules. That instinct can be commercially useful, but it also breeds tolerance for corners cut in the service of growth. Over the past decade some counter, currents have started flowing. Proxy advisory firms, once a negligible presence, routinely recommend voting against promoter salaries or reappointments when performance lags. Institutional shareholders now use social media to air grievances, and companies keen to attract global ESG money expend real effort to improve disclosures. Reputation, never trivial, has become more measurable in the age of instant outrage. Still, these positive shifts coexist with the old codes. Board packs arrive a day before meetings, many independent directors depend on promoter patronage for repeat appointments, and compliance officers sometimes treat rule, books as procedural burdens rather than ethical commitments.

VII. Comparative Insights
Comparative experience illustrates what remains to be done. After the Enron scandal, the United States enacted the Sarbanes, Oxley Act, which forces chief executives and chief financial officers to certify personally that financial statements are accurate; intentional misstatements invite prison terms. Britain’s Senior Managers and Certification Regime, aimed at banks but extending steadily into other sectors, assigns named individuals responsibility for identified risk areas, ensuring that accountability cannot be diffused across committees. In continental Europe, the new Corporate Sustainability Reporting Directive extends disclosure beyond profit to environmental and social impacts, on the theory that twenty, first, century stakeholders demand more than quarterly earnings. India has borrowed elements from each of these models yet hesitates to attach the same level of personal exposure for fear of discouraging talented professionals from taking board seats. Whether that caution is wise or indulgent is an open debate.

VIII. Prospects for Anticipatory Governance
So, what might anticipatory, rather than reactive, governance look like in the Indian setting? One strand of thought emphasizes regulatory technology. The Ministry of Corporate Affairs is rolling out MCA, 21 3.0, an online filing system capable of ingesting structured data. If designed well, the platform could flag early-warning signs, persistent negative cash flow, repeated resignation of key audit partners, or large inter-company loans unexplained by business logic, and push the information to regulators before crisis strikes. Another strand focuses on treating scale, not listing status, as the trigger for rigorous oversight. A private company that crosses, say, one thousand crore rupees in turnover or holds customer advances exceeding a threshold could automatically be classified as a “public, interest entity” and brought under quarterly reporting, tighter audit rotation and whistle, blower schemes with real protections. A third idea revives the conversation about professional liability. If engagement partners at audit firms faced significant personal penalties for negligence, the incentives to look away when major clients resist scrutiny would diminish rapidly. None of these suggestions is radical; elements exist in draft bills and discussion papers. What is missing is political clarity and bureaucratic bandwidth to weld them into an integrated regime.

IX. Conclusion

While structure matters, the soft architecture of trust perhaps matters more. Entrepreneurs often argue that punitive policies will stifle innovation; bureaucrats retort that fearless entrepreneurship cannot be built on taxpayers repeatedly absorbing private folly. The balance may lie in transparency. In markets where information flows freely and fast, participants discipline one another long before a judge or inspector steps in. Byju’s troubles became impossible to gloss over once investors published resignation letters and social media circulated them widely. Market valuation fell, prospective hires hesitated, and the company had to start negotiating earnestly with creditors. The episode suggests that civil society, financial press and online commentary now form an auxiliary regulatory layer. That pressure will be effective, however, only if primary data, audited numbers, board minutes, related, party terms, is promptly released. If secrecy persists, rumor fills the vacuum, harming companies that may merely be late, not fraudulent. A disclosure, first culture therefore protects honest promoters as much as it deters dishonest ones.

Where does this leave the original mansion metaphor? Walk down Nariman Point or Gurugram’s Cyber City today and you will still see glittering headquarters, but the doormen check identity cards more carefully, visitor registers have digital time, stamps, and fire exits are no longer padlocked during the day. These small changes matter. They show that oversight, once triggered, can embed new routines. At the same time, hidden basements have not disappeared; they have merely acquired better wallpaper. The decisive test will arrive when the next cycle of cheap capital floods in, as it almost inevitably will. If lenders, auditors and directors ask tougher questions at that moment, before defaults mount—India may finally cross the threshold from remedial governance to preventive discipline.

Legal scholars sometimes invoke the idea of “learning by catastrophe,” the notion that dramatic failure is the price societies pay for improved rules. Kingfisher, Jet, IL&FS and Byju’s supplied precisely such catastrophes. They forced Parliament to legislate faster, regulators to collaborate, and ordinary citizens to appreciate how corporate excess can ricochet into their provident, fund statements. The danger is complacency: believing that headline statutes equal solved problems. They do not. Rules harden into deterrents only when enforcement is swift, proportionate and certain, and when business culture internalizes the lesson that reputational damage can spread quicker than any lawsuit. The Indian system, today, delivers that certainty unevenly; pockets of excellence coexist with long corridors of delay.

Yet optimism is not misplaced. Few emerging economies have overhauled bankruptcy law, strengthened accounting oversight, digitized company registries and cultivated activist investors within a single decade. Momentum exists; it merely needs patience, resources and the political will to place integrity at the center of economic ambition. If those ingredients coalesce, the boulevard of corporate mansions will still host grand parties, but the hosts will remember to pay their caterers, clear fire exits and keep the neighbors on their side. Accountability will have moved from the press release to the planning spreadsheet, and Indian capitalism will have taken a decisive, if belated, step toward adulthood.