Satyam scam: The legal perspective
It's the worst fraud in corporate India's history, Ramalinga Raju admitted to cooking Satyam's books for years; resigned as Satyam Chairman. Ram Mynampati will act as the interim CEO. Both the centre and the state government promised action against Satyam and Ramalinga Raju. The Andhra Pradesh government may also review Satyam's three Special Economic Zones, and all projects undertaken by Maytas.
Market regulator SEBI has also launched a probe into alleged insider trading in the Satyam stock and is also in touch with the exchanges for coordinated action. Commerce Minister Kamal Nath said there’s no question of the government taking Satyam over.
PricewaterhouseCoopers said, “We have learnt of the disclosures made by Chairman of Satyam and are currently examining the contents of the statement. We are not commenting further on this subject due to issues of client confidentiality."
The Confederation of Indian Industry (CII) today expressed its shock and disappointment at the disclosures made by Mr B Ramalinga Raju on the financial position and financial statements of Satyam Computer Services. CII believes there is a need to immediately examine the loopholes in regulation, accounting, audit and governance that allowed such lapses to occur and address them with urgency. While the occurrence of such events in a major company is a matter of deep regret, CII believes it would be inappropriate for this to be the basis of questioning of general governance standards in other companies. Corporate
India Inc has been shocked by the Satyam scandal. Industry veterans have called for more rigid auditing processes and have called for a dramatic change in mindsets.
Deepak Parekh, Chairman of HDFC said, “I am surprised, I am shocked. It is a scandal, it’s a fraud of this proportion and I don’t think anyone expected this out of Satyam Computers. No one noticed for so long. What was the professional staff doing? What was the financial controller doing? Apart from the independent directors, auditors, there is a large organization in Satyam.”
Rajeev Chandrashekhar, President, FICCI said, “Obviously the unkind and the strongest argument would be that they were in some way a part of this, so either way I do not think that they are off the hook. I think that the independent directors have a responsibility and there is probably a discussion that needs to happen on what kind of directors independent directors are. Is it independence that is just a qualification or is it independence and the capacity to understand the business that is required when you actually get these independent directors on boards.”
Anand Mahindra, VC & MD, M&M said, “I am very, very angry at this development because I think it's done incalculable and unjustifiable damage to the image of India abroad in a generic sense and particularly to the image of Indian IT which was ironically what led the creation of brand India in the past decades. It’s done damage to the credibility of corporate governance, of independent directors in
source: www.moneycontrol.com
