Thursday, January 8, 2009

Satyam - Total Falsehood!

The revelations by Satyam’s promoter Ramalinga Raju, come as a big blow not only to the company’s shareholders and employees but also to the Indian IT sector and the Indian stock markets and brand India Inc. at large. I do not have much knowledge to comment or write something noteworthy on this event, but I would like to post these 2 links that discuss this issue in entirety…

Huge fraud in Satyam Computers: Dr. Krishna has analysed thoroughly and objectively each and every implication of this episode and given his views regarding the steps to be taken by common retail investors. Must Read!
He had also earlier written about 15 stocks that may require regulatory authority’s inspection - 15 Indian Stocks that may shock you!!! Again, a must read for all, esp. our policy makers and regulators :P

Everyone is writing now that India has/had a great image in terms of corporate governance standards; but I wonder whether these soothsayers ever did a reality check. KPMG released its Annual Fraud Survey in 2008; sometime in Sep-Oct; it had clearly reported that corporate fraud is a constant threat to businesses in India.

Over 80 percent of respondents (which included top executives at top companies) recognized that fraud is a major challenge in corporate India. Moreover, almost 70 percent of the respondents believe that fraud in India may increase in the next two years. 60 percent of the respondents experienced fraud in their organization in the last two years. Out of these, 14 percent experienced more than 10 instances of fraud, whereas 75 percent experienced a maximum of five instances.

I know that Satyam accounting scandal is a big incident with huge implications but I don’t know if it is really an exception and a standalone event – as some people are saying. It may just be the first scam to come in the news.



P.S.: Just stumbled across this blog by Bernard Madoff!!! - "I'm Bernard Madoff--I'm Telling All. Right Here. Trust Me." Maybe we can find Raju also blogging on similar lines very soon....

2 comments:

Varun Reddy Sevva said...

Another case study for the future IIM Grads - More to say a first in a series of case studies to come based on accounting frauds (So far we have just one on World Comm). India is going to be on the world map in a big scale, eh?

Thank God we still have companies like Infosys that epitomize good accounting standards and honesty in its transactions...

vikram said...

It comes down to incentives....theres not enough incentive to become a scientist post IIT, or for that matter a prof post IIM. Girls would rather marry a hot shot MNC guy rather than a scientist. Another fact is IIT's are not training ground for scientists, they are for engineers. We do not have enough institutes of repute like IISc.
Another point is IIT NIT enng grads are coming back to core engg jobs in a big way coz of the market meltdown.