Ratatouille Raju…
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Surely, he is a great chef. To have cooked a Rs 7,000 crore or $1.4 billion dish, he needed some special talents. Sadly, the 50,000 plus employees and lakhs of shareholders are not in a position to appreciate it. What is scary is the lack of action on the part of our institutions. In the US, two firms have already gone for a class suit action. In India, the central government is claiming that the Centre cannot ask the state to arrest Raju (as it is a state subject). And even now, the state has not filed any criminal charges. Instead the state chief minister has urged that the good offices of N R Narayan Murthy (Infosys) and Azim Premji (Wipro) should be used to provide credibility to the company. At present, market regulator Sebi is checking the books of both Satyam and audit company PriceWaterhouse. Both the exchanges have said Satyam will be replaced by other companies from Monday, January 12. Compare that with NYSE, which banned trading on Wednesday itself. What is worse is that according to the letter written by Raju, there was no one other than him and the managing director had any idea about this scam. Someone please make me believe this one. The board members, CFO and others in the finance department, marketing heads… wasn’t anyone aware that the company revenues weren’t actually so or for that matter, their spread was a mere 3 per cent vis a vis the 30-plus per cent that the company claimed. Sounds preposterous… And the last and the best one, where is Raju? – His lawyer claims he is in Hyderabad. Some others say he is in Dubai, yet others in London. Have any of the authorities met or spoken to him? – At least, no one is saying so. By now, in most countries, he would have been at least questioned by the authorities and put under some kind of house arrest. While, we wait for investigations and committees to come to with their findings, for now, an important point to note is that that whether it is actual terrorism or financial terrorism, we are equally inept at handling both. No wonder, whatever’s on the menu – guns and grenades or vanishing cash – in our country, the chef always gets away. |
(12 votes, average: 2.92 out of 5)
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All the content posted in the 'Business Standard Blogs' section, unless specified otherwise, are made by Business Standard employees. The content posted in 'Business Standard Blogs' does not follow routine internal Business Standard reviews and editorial processes and should be considered only as the views and opinions of the employees and not of Business Standard.
January 27th, 2009 at 12:13 pm
ICICI Bank Group Company $ 25 Bn Nasdaq Listed worked with PWC in e-governence space and Manipulation of Govt Funds happened
please onpen the following link:
http://economiccrimeexperts.ning.com/profiles/blogs/icici-bank-group-company-25
January 14th, 2009 at 9:43 am
In my opinion, as every cloud has a silver lining Chef’s dish too has one.
Let me begin with simple thing. How many of analysts or influential ibankers were interested in the quality of the corporate governance by the way? Almost all were looking the gigantic numbers in the black & white. Any miss on the so called ‘Street’ expectations would result in the downgrading of the stock without actually considering the long term (indeed a long term not just few QoQs).
Few ‘Good’ analysts wouldn’t even know the history of the promoter except written on the company website. So I strongly feel that Satyam’s experiment with the UNtruth has some albeit something to do with influential analysts and ibankers too.
As I wrote on Mumbai Samachar’s Monday article, this incident will surely call for new parameters for accountability and responsibilities of the appointed watch dogs (auditors) and certainly touch and go type promoters will find hard to run always so easily. Good news is that the investors will pay premium to ethically governed Cos. and go beyond QoQ nos. That is after all desirable for good promoters and investors.
Infy’s cash disclosure (yesterday) is just first evidence of silver lining I talked about.
January 13th, 2009 at 2:02 pm
The statement by some of the ministers that Government may bailout Satyam is a very irresponsible statement — How can TaxPayers money be used to bailout a fradulant company?
This scam is a result of irresponsible & corrupt promoters, board of directors and management of Satyam — they should all be booked for this scam and all their assets (including the landbank of Satyam / Maytas) confiscated and used to bailout, if possible.
The only fallout is Employees & Customers — they should be facilitated to transition out of Satyam in a smooth manner.
Note that there is a host of class-action suits being filed against Satyam in US and the corrupt company is likely to make huge fines / penalties once these are ruled against Satyam (which will happen)… If TaxPayer money is used to ‘revive’ Satyam, it will end up being used for these and not to actually revive the company.
Instead of this the Cong govt should not resort to use the Tax Payers money for this purpose — just to appease some section of the voters prior to the forthcoming polls… If it does, its sure to backfire.
Let us accept that it was a big scam and reassert to the world that corruption will not be tolerated in India — That`ll definitely set the right image of India in the eyes of global investors and help rebuild their confidence.
January 13th, 2009 at 9:12 am
Valid concerns and a thoughtful title. It does sound preposterous that a fraud of this scale could be perpetrated over the years in a listed company (listed in BSE, NYSE & Euronext) with reputable board and respectable auditors. It’s unfair to blame the Central Govt entirely. I think CG has taken some wise course of action by exercising the powers under Companies Act through re-constituting the board and bringing in a credible and make-shift executive management. It’s best not to rush into such matters as investigation by specially appointed auditors has to run its course to uncover the extent of fraud and go to the bottom of it. I am of the view that the ex-CEO must be under watchful custody and should not be allowed access to mails and telephone. It’s essential to curtail his scope to manipulate things while investigations are still on.
The role of the independent directors and other directors is also questionable. Such people regardless of their impeccable background must be legally restrained from becoming company directors in future to ensure accountability and responsibility in future. I would think that a role as board member in a company must come to be viewed as an onerous responsibility than as a fashion tag.
January 12th, 2009 at 12:06 pm
hi,
the article is an interesting read.
it is a real wonder how cud he manage keeping such huge numbers ‘under the wraps’, hidden from so many people. the already dwindling confidence of investors will show yet another drop, post the unfortunate incident.
hope no similar thing happens, again.
January 10th, 2009 at 10:10 am
I don’t agree with the statement that there is a lack of action from instutitions and there is already class action law suits in US. The class action law suits are bread and better of many attorney community and small time people wh wait an hunt for this kind of opportunity. These are filed by individuals and not NYSE, SEC etc. So lets not write without knowing the basic regulations for such white coller crimes.
State givt can’t arrest without having proper evidences and also this a nor a normal case of petty theif where the cops go and arrest. The police and state govt would not know how to respond to these situation, these should be handled by federal(central) agencies like vigilance, CBI etc. So for that 24-36 hrs might not be enough. Based on self confession one can’t be arrested since it can be withdrawn anytime )escpecaiily in India, we all know that)…
The AP govt is foolish to ask premji (who holds +80% stake in the company) and infy ( who have are not saints in acquiring lands at unfair price) and more over they are IT companies and has a huge conflict of interest.
By now in 48 hours we know the course and how Govt has responded to this crisis.
GOvt and institutions have done a GREAT job, tremendous job by dissolving the board and trying to set its own nominees. This is one of kind in the world, it is not notaionalization of a public ltd company but Govt is fully acting in countries, employees and investors interest. Indian govt/ministeries had done the same few years back for Global trust bank by asking a peer company to take our and preotected the depositors.
So hubmle request for the writers in these blogs NOT to write something without knowing the facts and verifying the past. Every body can write but it should be educational and thought provoking.
January 10th, 2009 at 12:16 am
Hi,
I find the entire idea of constituting a caretaker team of Murthy, Premji and Ramadorai as flawed. Why do we want these people in that team? Wont it result to conflict of interest? They are in the same line of business and the only thing they would do is probably to attract the Satyam clients to their respective companies and may be try to even poach the star performers. They wont do justice to restructure Satyam. I really hope that govt doesnt appoint these people and anyone from the rival companies in the new board of 10 members which has already been announced! It would a corporate governance question mark for the new board itself.
Cheers,
Ritesh
January 9th, 2009 at 7:30 pm
Isn’t it hilarious that Premji who put his own son in senior management role at Wipro and Murthy of “I am the only person qualified to be President” fame are going to provide credibility to foreign investors.
Wow! Only in India can this happen.
Clearly the entire senior management team at Satyam needs to be investigated for their complicity in this giant fraud.
January 9th, 2009 at 5:53 pm
I totally agree with Anand. I am just waiting for the Politicians to come up with lame excuses and diffuse the atrocity. Hope they don’t chant “Pakistan’s hand here…”
January 9th, 2009 at 4:46 pm
I have no sympathy towards Raju. He must be punished severely !
But we are a country who are yet to punish people who attacked parliament ! We are a country where MLA can kills an engineer and gets away with it. Someone attacks our country and we keep asking big daddy’s of worls to provide proof and ensure action is taken against a country which sponsors terror !
Now tell me, are you still expecting any actions to be taken against this great chef of yours !
Lets not day dream, pray for employees of satyam and their familieis. ( Only lower echleons ) I guess everyone from middle management was in knowhow of how satyam operated !
Anand.
January 9th, 2009 at 4:07 pm
Great chef? All Sify.com now has is food recipes, especially under its indiaworld portal of websites.
After Satyam scam, only the very trusted corporate houses will enjoy investor confidence. There will be flight to safety, the safety of renowned businesses that have stood investors in good stead over the decades, even centuries.