Bala Dharan

Robert B. and Candice J. Haas Visiting Professor in Corporate Finance Law

2021-2022

Areeda 526

617-495-2955

Assistant: Jane Reader / 617-495-7719

Biography

Bala Dharan is Robert B. and Candice J. Haas Visiting Professor in Corporate Finance Law and Senior Lecturer at Harvard Law School. He has been teaching at HLS since 2008. Professor Dharan is also J. Howard Creekmore Professor Emeritus at the Jones Graduate School of Business at Rice University, a Research Affiliate at MIT Sloan School of Management, and a Director at Berkeley Research Group, a litigation and business consulting firm. He has been a professor at the Kellogg Graduate School of Management at Northwestern University and a visiting professor at MIT Sloan School of Management, Harvard Business School, and Haas School of Business at University of California, Berkeley. He has published widely in major accounting and finance journals, and is the co-author of four editions of textbooks. He has been invited three times to testify before U.S. Congress on financial reporting and corporate finance issues. Professor Dharan has extensive business and litigation consulting experience in financial reporting and disclosures, forensic accounting and investigations, damages analysis, finance, valuation, investment analysis, corporate governance, and auditing. He has served more than 25 times as a testifying expert in litigation and arbitration matters. He has international arbitration experience in many of the major international forums, and is named to the 2015 International Who's Who of Commercial Arbitration. CPA; ABV (Accredited in Business Valuation); CFF (Certified in Financial Forensics); M.S. 1977 and Ph.D. 1981 in Accounting, Carnegie Mellon University; MBA 1975 in Finance, Indian Institute of Management, Ahmedabad; B. Tech 1973 in Chemical Engineering, Indian Institute of Technology, Madras.

Areas of Interest

George Batta, George Chacko & Bala Dharan, A Liquidity-Based Explanation of Convertible Arbitrage Alphas, 20 J. Fixed Income 28 (2010).
Categories:
Banking & Finance
,
Corporate Law & Securities
,
Disciplinary Perspectives & Law
Sub-Categories:
Investment Products
,
Financial Markets & Institutions
,
Securities Law & Regulation
,
Empirical Legal Studies
Type: Article
Abstract
The authors examine the extent to which excess returns from convertible arbitrage represent positive returns to managers from exploiting pricing inefficiencies versus compensation for exposure to systematic risk factors. Initial empirical tests show that when liquidity risk is excluded as a factor, a good portion of abnormal returns to convertible bond strategies appears to be driven both by overpricing of the underlying equity and apparent underpricing of convertible bonds. However, when the effects of liquidity are included, abnormal returns to convertible bond arbitrage essentially disappear and only remain localized in convertible debt trading closer to the issuance date.
Enron and Other Corporate Fiascos: The Corporate Scandal Reader (Nancy Rapoport, Jeffrey Van Niel & Bala Dharan, eds., Foundation Press 2009).
Categories:
Corporate Law & Securities
Sub-Categories:
Securities Law & Regulation
,
Shareholders
,
Corporate Governance
Type: Book
Abstract
This law school text explores the Enron debacle from a variety of different aspects. Essays analyze the business-government interactions and decisions that laid the foundations for Enron's growth and subsequent demise. Other essays describe and detail the complex web of partnerships and accounting tricks used by Enron to hide bad news and project good news. Additional essays focus on the ethical and legal dimensions of the Enron crisis, and the subsequent lessons for business and law students, as well as for society.
Bala Dharan, Valuation Issues in the Coming Wave of Goodwill and Asset Impairments, 15 Bus. Valuation Update 1 (2009).
Categories:
Corporate Law & Securities
Sub-Categories:
Securities Law & Regulation
,
Business Organizations
,
Corporate Law
Type: Article
George J. Benston et al., The FASB's Conceptual Framework for Financial Reporting: A Critical Analysis, 21 Acct. Horizons 229 (2007).
Categories:
Banking & Finance
Sub-Categories:
Finance
Type: Article
Abstract
This paper addresses the issues that confront the FASB and IASB in developing a new conceptual framework document. First, we suggest characteristics that a conceptual framework ought to exhibit. Most of these suggestions are based on our critique of the existing framework and the FASB-IASB work in progress. Second, we present a model framework that exhibits these characteristics. We emphasize up front that this framework is quite explicit. It goes to the heart of what a framework document should do: it places specific restrictions on what constitutes admissible accounting standards. The purpose of our effort is to stimulate broad discussion of alternative approaches to foundational documents and to offer a specific example of such an alternative approach.
George J. Benston et al., Comments by the American Accounting Association's Financial Accounting Standards Committee on the FASB's 'Conceptual Framework for Financial Reporting (Hereafter CF)', Call for Preliminary Views, July 6, 2006 (2006).
Categories:
Banking & Finance
Sub-Categories:
Finance
Type: Other
Abstract
The American Accounting Association's Financial Accounting Standards Committee is pleased to have an opportunity to express its views on the FASB's Call for Preliminary Views on its Conceptual Framework. We applaud the decision of the FASB to develop a Conceptual Framework and seek comments on its preliminary views and hope the financial reporting community will participate enthusiastically in this important activity. While we understand the importance of a Conceptual Framework, especially for accounting standard setting, we have deep reservations about the current document. In our response we explain why we think that the Preliminary Conceptual Framework is unlikely to be helpful in setting conceptually sound accounting standards. In particular, as you will see, we have reservations about the following key points: 1. We believe the Preliminary Conceptual framework is too focused on an investment role of accounting, and neglects the more important stewardship role of accounting. 2. The reliance on fair values that are not grounded on actual relevant market transactions (such as mark to model numbers) are not trustworthy. We believe that provision of soft accounting numbers will be harmful to the relevance and usefulness of accounting numbers. 3. We agree with the FASB's desire for neutral accounting numbers. However, given management's upward bias in reporting, we feel that conservative standards are required to produce neutral accounting numbers, and 4. We believe the FASB's standards should not be determined based only on a conceptual framework. Concepts such as relevance are too broad to be useful in determining a specific standard. A more rigorous field-performance-testing model is needed before conducting real world experiments with new accounting standards. We recommend allowing companies more flexibility in their reporting choices to allow market forces a greater role in setting accounting standards. In closing, despite our reservations about the Conceptual Framework, we applaud the FASB's desire to seek views on its preliminary effort and hope to participate again as this important activity progresses further.
Bala G. Dharan & David L. Ikenberry, The Long-Run Negative Drift of Post-Listing Stock Returns, 50 J. Finance 1547 (1995).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Law
,
Securities Law & Regulation
Type: Article
Abstract
After firms move trading in their stock to the American or New York Stock Exchanges, stock returns are generally poor. Although many listing firms issue equity around the time of listing, post-listing performance is not entirely explained by the equity issuance puzzle. Similar to the conclusions regarding other long-run phenomena, poor post-listing performance appears related to managers timing their application for listing. Managers of smaller firms, where initial listing requirements may be more binding, tend to apply for listing prior to a decline in performance. Poor post-listing performance is not observed in larger firms.

Education History

Current Courses

Course Catalog View

Areeda 526

617-495-2955

Assistant: Jane Reader / 617-495-7719