Name: Aarifa Aamir

Class: BS. Commerce (III)

Students ID: JUW 07357

Submitted To: Miss Mehwish Abbasi

Course Name: Corporate Governance

File Topic: Final Assignments (CP)

Name: Aarifa Aamir
Class: BS.Commerce (iii)
Corporate Governance (Solved Case Studies)

Case Study # 1
World’s Worst Man-made Disasters
Question # 1
What were the factors that caused the Chernobyl Nuclear Disaster? What were the consequences
of the nuclear tragedy?
On April 26, 1986, the Number Four RBMK reactor at the nuclear power plant at Chernobyl,
Ukraine, went out of control during a test at low-power, leading to an explosion and fire that
demolished the reactor building and released large amounts of radiation into the atmosphere.
Safety measures were ignored, the uranium fuel in the reactor overheated and melted through the
protective barriers. RBMK reactors do not have what is known as a containment structure, a
concrete and steel dome over the reactor itself designed to keep radiation inside the plant in the
event of such an accident. Consequently, radioactive elements including plutonium, iodine,
strontium and cesium were scattered over a wide area. In addition, the graphite blocks used as a
moderating material in the RBMK caught fire at high temperature as air entered the reactor core,
which contributed to emission of radioactive materials into the environment.
Question # 2
Explain the Exxon Valdez disaster. What happened to the spilt oil? How was it retrieved?
On March 24, 1989 the oil tanker Exxon Valdez ran aground in Prince William Sound, Alaska,
spilling 11 million gallons of oil. The ecologically sensitive location, season of the year, and
large scale of this spill resulted in one of the largest environmental disasters in U.S. history.
Exxon settled in 1991 with funds disbursed in three discrete parts: criminal plea agreement ($25
million), criminal restitution ($100 million), and civil settlement ($900 million).
The spill affected more than 1,300 miles of shoreline, with immense impacts for fish and wildlife
and their habitats, as well as for local industries and communities.
The oil killed:
 An estimated 250,000 seabirds
 2,800 sea otters
 300 harbor seals
 250 bald eagles
 As many as 22 killer whales
 Case Study # 2
Bhopal Tragedy: Mother of All Industrial Disasters
Question # 1
Why was the Bhopal gas tragedy nicknamed as the mother of all industrial disasters?
On December 3 1984, more than 40 tons of methyl isocyanate gas leaked from a pesticide plant
in Bhopal, India, immediately killing at least 3,800 people and causing significant morbidity and
premature death for many thousands more. The company involved in what became the worst
industrial accident in history immediately tried to dissociate itself from legal responsibility.
Eventually it reached a settlement with the Indian Government through mediation of that
country's Supreme Court and accepted moral responsibility. It paid $470 million in
compensation, a relatively small amount of based on significant underestimations of the long-
term health consequences of exposure and the number of people exposed. The disaster indicated
a need for enforceable international standards for environmental safety, preventative strategies to
avoid similar accidents and industrial disaster preparedness.
Question # 2
Discuss the aftermath of the Bhopal disaster.
Since the disaster, India has experienced rapid industrialization. While some positive changes in
government policy and behavior of a few industries have taken place, major threats to the
environment from rapid and poorly regulated industrial growth remain. Widespread
environmental degradation with significant adverse human health consequences continues to
occur throughout India.

Case Study # 3
The Tylenol Crisis: How Ethical Practices Saved Johnson & Johnson
from Collapse
Question # 1
Explain in your own words the Tylenol crisis. What were the factors that accentuated the crisis?
In the years leading up to 1982, Tylenol dominated the over-the-counter painkiller industry with
a controlling 37 percent share of the market. Consumers everywhere counted on Johnson &
Johnson (J&J) to deliver a product that was consistently effective and trustworthy. The empire
that Johnson & Johnson had carefully nurtured was critically threatened in October of 1982 when
seven people in the Chicago area died from ingesting Tylenol Extra Strength. The victims ranged
from a 12-year-old girl who woke up with flu symptoms to a mother who had just given birth to
her fourth child. All seven victims were seemingly unrelated and had died under the same
mysterious circumstances with no evidence of foul play.
Question # 2
What was the strategy adopted by Johnson & Johnson to win back public trust? Did it have the
desired impact?
When news of the crisis broke, a crisis response team was quickly established, headed by then-
CEO of Johnson & Johnson James E Burke (1925-2012). As terror spread throughout the nation,
Burke, one of Fortune’s top 10 CEOs, and the crisis response team were faced with the
immediate decision of either risking more deaths or removing the product from the shelves. After
originally recalling all Tylenol products in the Chicago area, J&J decided it was in the public’s
best interest to recall all 31 million Tylenol bottles — which were valued at an astounding $100
million. Along with the recall, Johnson & Johnson opened a 1-800 hotline for anyone seeking
information, sent over 400,000 warning messages to doctors’ offices and pharmacies, halted all
advertising of the product, and offered a $100,000 reward for anyone with information about the
suspect. In a final effort to restore its reputation, J&J exchanged all already-purchased Tylenol
capsules with a new form of the medication: tablets, which are much harder to tamper with. This
exchange cost Johnson & Johnson millions of dollars, but if it even saved one life, the benefit far
outweighed the cost. With every available preventative action taken, and no more reported
deaths, the crisis response team turned their attention to phase two: the uphill battle of regaining
consumers’ trust in Tylenol products.

Case Study # 4
Global Trust Bank: The Bank That Went Bust
Question # 1
Explain the causes that contributed to the collapse of the Global Trust Bank.
Since 2001, GTB's name was associated with scams and controversies, thereby casting shadows
over the credibility of the bank and its management. Due to the over exposure to capital markets
and huge NPAs, the bank was in a financial mess. When GTB tried to cover up its monumental
NPAs through under provisioning, RBI - the Central bank and the regulatory authority for banks
in India, appointed an independent team to review the finances of the bank. The review revealed
various financial discrepancies kept covered by the bank.RBI imposed a three month moratorium
on GTB on the ground of "wrong financial disclosures" and within two days the bank was
merged with Oriental Bank of Commerce (OBC), a public sector bank. With the merger
becoming effective, GTB's identity came to an end and it became a part of OBC.
Question # 2
Though RBI's decision to merge GTB with OBC came as a relief for the former's depositors,
analysts and industry experts raised concerns about the way RBI handled the entire issue. They
said RBI had announced the merger of GTB and OBC, in less than 48 hours of the imposition of
the moratorium.
If the deal was already in process, they wondered why RBI took the extreme measure of
imposing a moratorium instead of announcing the mandatory merger straight away. This step
would have prevented panic and anxiety among GTB's depositors. Analysts also wondered why
RBI rejected the proposal of equity injection from NewBridge, which would have solved the re-
capitalization problem of GTB easily and could have prevented the bank's eventual collapse.
They wondered why RBI favoured the merger with OBC and did not try for competitive bidding
to acquire GTB. Moreover, though the interests of GTB's depositors were protected, its
shareholders lost their total investments in the bank overnight

Case Study # 5

Question # 1
Explain in your own words how Ketan Parikh used other people’s money to play his game of
speculation
The ICE sector was booming during that time and Ketan would invest majorly into these sectors
which helped him gain the trust of the investors. He was trading in Kolkata Stock Exchange
which was lacking strict regulations itself. Hence, there was no one to watch his moves. He
would buy shares of low profile companies when they were trading at low prices and joined
hands with certain other traders to frequently buy and sell the stocks of such companies which
enabled the sudden price rise. The financing method of buying shares and getting pay orders and
later getting them pledged when the prices shoot up also helped him create a Bull Run in the
stock market. Many investors believed that slipshod reactions and regulations of SEBI who could
have noticed the unusual price movements in the market helped the scam to accumulate more
losses to them. His connections with celebrities, political and religious leaders also aided him to
get the majority of the fund from large corporate and businessmen.
Question # 2
Discuss briefly Ketan Parikh’s modus operandi to ramp up shares of select companies. What was
the impact of the scam on the market?
Ketan Parekh had a cover story to back his unscrupulous dealings and throw skeptics off track.
He was said to be a believer of the Information, Communication and Entertainment sector i.e. the
ICE sector. This was nothing special given the fact that late 90’s and early 2000’s were the time
when the IT boom took place and these were the stocks which were actually growing by leaps
and bounds worldwide. Hence, it seemed to appear that the stocks Ketan Parekh was picking
were growing because of their fundamentals. The massive 200% growth in his shares was
therefore not as astounding and did not attract as much attention as Harshad Mehta’s escapades
did. However, in reality, Ketan Parekh was looking out for stocks which had a low market
capitalization and low liquidity. He would then pump money into these shares and start fictitious
trading within his own network of companies.