Satyam - the word means truth in Hindi. The company sure did not live up to its name. The Chairman B. Ramalinga Raju’s has admitted that Satyam Computer Services Ltd’s Balance Sheet was manipulated rather fabricated had its usual effect on the market, the sensex went on a downhill slide and no one knows where it will stop. It is a fraud worth Rs 50 billion, no mean amount.
In the long run, the Satyam fraud will have long reaching consequences on how the markets operate, corporate governance as well as the attitude of Foreign investors in India. On the face of it, only Satyam looks to be the culprit. But, believe you me, it is a collective failure of the governance, government institutions and the bureaucracy which controls everything.
As is the case with all the ministeries, who have insulated themselves from everything that goes on in the country and only act when the deed is done, the ministry of Corporate affairs has woken up and called the Satyam fraud a shameful thing. Whether the ministry is including itself in part of the shame is easy for any one to guess. The ministry official added that "All regulators and government agencies will make coordinated efforts to get to the bottom of the Satyam wrongdoings, the official said, adding that the 'company management not been fair to the shareholders'." What is this statement supposed to mean? When the Chairman of the company has admitted to the fraud, one does not need to get to the bottom of things. He will tell everything himself. The ministry ought to have been proactive and done something, while the company was undertaking the fraud, to protect the interests of the shareholders.
The Securities and Exchange Board of India ( SEBI )has termed the fraud as horrifying and promises to take all actions as per the law. Hello! The SEBI is the market regulator and is supposed to be on top of things happening in the stock market, not only for taking action as per the law. The SEBI is required to inspect the books of all the companies, why did they not come to know about the Fraud.
PricewaterhouseCoopers were the auditors for the company. What kind of audits have they done in the preceeding two years? Why did they not point out the irregularities to the Board of Directors? That can happen only if the auditors were also glove in hand with the company in conducting the fraud.
Next come the bankers to the company. Bank of Baroda, BNP Paribas, ICICI, HDFC, Citi Bank, HSBC all big players in the Indian banking sector. How come none of them scrutinize the balance sheets of their big customer? Or were they also aware of the gory happenings within the Satyam Accounts department.
What about the credit rating agencies? Even they have been giving thumbs up to Satyam for a long time. Were they not aware of the irregularities? Or are they too dumb and irrelevant to bother checking and understanding a company's accounts?
What did the Government and the various regulatory authorities in India do when they came to know of the $1 Billion lawsuit against Satyam early 2007 filed by UPaid Systems, American based mobile and online payment specialist. The charges were, no pints for guessing this one, Fraud and Forgery. Satyam tried their level best to stay the proceedings but failed miserably at all levels and the case will go to trial this year. This does confirm that there was some kind of tenebility in the case. Even this case did not prompt any one in India to look up the books of Satyam.
In October last year the world bank banned Satyam for malpractice, that is, for installing spy software on the world bank computers. Even that did not wake up any one in India.
The bigger question here is whether this is the way the Indian Economy has been growing all these years? What about the other companies? Maybe they also have been inflating their balance sheets in a bid to enter and grow in the International markets. All this while people have been citing the example of corporate governance to remedy the malady which our political governance has. What do we do now, now that our corporate governance has also failed.
Welcome to Reading Cafe Blogs. Read articles.Latest news stories, gossip, photos et al.
Custom Search
Subscribe to:
Post Comments (Atom)
Mount Lewotabi Laki Laki Major Volcano Eruptions Cause Panic
Tweet A major volcanic eruption has just occurred in eastern Indonesia on Mount Lewotabi Laki Laki, causing it to literally blow its top up...
Popular Posts
-
Tweet Kamala Harris Vs Donald Trump - US Election Results Live Today According to latest news reports, Republican candidate Donald Trump ...
-
Tweet A few days back a section of a podcast went viral. The subject of discussion was MoU signed between Indian Air Force and Uber towards...
-
Tweet What does the term "Digital Arrest" mean? Well, "Digital arrest" typically refers to the phenomenon where a per...
-
Tweet The Super Bowl LV 2021 is the 55th instalment of the NFL Championship Game that is scheduled to be played on 7th February 2021 . Th...
-
Everybody knew Michael Jackson as the greatest Pop star, The King Of Pop, in the music world. His music was an instant craze with all the pu...
-
Tweet Donald Trump addressed his supporters in Florida to celebrate his victory in the 2024 Presidential election. He thanked the America...
-
Tweet Image Source: FMT According to a latest news report - " Raphinha turned down overtures from Saudi Arabia to remain at Barcelona ...
-
Tweet According to latest news reports: The International Olympic Committee (IOC) has expressed strong support for India's interest in ...
-
Tweet St. Xavier’s College, an Autonomous College under the University of Mumbai, invites applications for Entrance Test and adm...
No comments:
Post a Comment