Corporate Shame – RAJU BAN GAYA GENTLEMAN
Today is the worst day for the corporates in India and the IT Industry in particular. IT Industry is claimed to be the cleanest of all other industries, more responsible towards the corporate governance and social responsibility.
Satyam’s involvement in the scam has caused lot of damage to the corporate India. It is a shame on the part of the Chairman and the auditors involved. It is interesting to note here that the auditors involved are PWC and they are not governed by the rules and regulations of the ICAI. Had it been an Indian CA firm involved, the whole world would have seen the scam from a different perspective.
The materiality of the case is very significant in the sense that it involves crores of Rupees. Rupees 5040 Cr to be precise. The auditors can’t escape on the grounds that the item/nature/amount was not material.
The implication of the case is very serious since this has not been done by a punter. It is done by a company which is an Index stock with several billion market capitalization. Further it is listed on NYSE and every quarter analysts draw their conclusions based on the figures announced. The investors holding the stock would have not imagined that this can happen to an Index scrip. There are very rare chances of stock moving up and gaining the momentum again.
The Satyam scam is the biggest one after Harshad Mehta and Ketan Parekh. This news has hammered the stock a lot, which touched a new 52-week low of 30.80. It has seen a drop of 77.51% to Rs 40.25, at close. Already the shape of the economy is bad and the new scam has hammered down the sensex by 749 points.
Satyam badly needs stimulus package and the companies like Tech Mahindra would think twice before investing in it. It would take lot of time for the regulatory authorities to check the facts and wash out the dirty figures. I don’t see anybody investing in the company before the regulatories complete their work.
This is the classic case of corporate terrorism and no one knows how to stop it like mumbai attacks. everyone is sheding tears but nothing is learnt from past scams. every one is blaming each other and the crook is at large laughing at his sleev. This case is very similar to the ENRON, If this is how the fraud balancesheet can be produced by the companies then how do we rely on any of the companies data? More than this what the authorities who are varifying these balancesheets are doing?
It’s a breach of Corporate Governance principles by a Company which won Golden Peacock Award for Corporate Governance in 2008. How can a person simply say sorry after cheating thousands of share holders and causing loss of billions of rupees to the poor share holders?
It has broken the confidence & trust of investors against Company as well as auditors & puts Question mark whether Auditors are dependent or independent.
Let us hope that the Government doesn’t say that IT’S DONE BY NON STATE ACTORS!