What comes in, goes out

Cairn India's $800-million loan to promoter Vedanta has yet again raised the issue of corporate governance

It’s a tricky decision whether or not to hold a stock when an excellent image is dashed by corporate governance issues. Investors in Cairn India are facing precisely this dilemma after the company came into the spotlight on July 23 for giving an $800-million loan (commitment for $1.25 billion) to promoter group company Vedanta. Cairn’s share price crashed 10.5% to Rs 308 following the news, raising fresh concerns over the Vedanta group’s corporate governance standards.