A year ago, the Indian market was in freefall. Investor confidence in the quality of corporate information had collapsed in the wake of the Satyam accounting fraud. Twelve months on, stocks have recovered spectacularly, bouncing 89 per cent. But it is not as if all the quality of earnings issues that worried so many international investors last year have suddenly disappeared. Many of the concerns over the book-keeping behind the almost six-fold increase in corporate profits between 2003 and 2008 are still lingering in the back of fund managers' minds. According to a study by Moody's Investors Service, 17 of the 30 constituent companies in India's benchmark Sensex index are family-controlled. They are the most vulnerable to such suspicions. The extent to which artful book-keeping remains prevalent at some of these tightly held groups is a subject of perennial speculation.

As today's report by the Asian Corporate Governance Association makes clear, India has a way to travel before it meets the standards of corporate governance that would make it a truly blue-chip market. While the country has undertaken numerous reforms in corporate governance over the past decade, especially in the area of company boards, independent directors and disclosure and accounting standards, certain critical problems still have to be tackled – particularly relating to the accountability of promoters (such as controlling shareholders), the regulation of related-party transactions, and the governance of the audit profession. Being audited by a big four accounting firm is not enough – Satyam's books had been checked by PwC for the six years leading up to revelation of the fraud. If India is serious about wanting Mumbai to become a regional and indeed a global financial centre, it must make sure the reforms under way have real teeth.