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Rabble Rousing Random Ramblings by S Jagadish is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported License.
Ramalinga Raju for Warren Anderson?
Shortly after the former Satyam founder-chairman Ramalinga Raju admitted to cooking the books to the tune of over Rs. 7000 crores, class action suits were filed in the USA. A class action suit is sort of like a PIL, except that PILs in India can be filed only against state or public bodies while class action suits can be filed against everyone, including private companies and individuals. In addition, someone filing a class action suit must necessarily have suffered financial/legal injury. As a result, it could be likely that Ramalinga Raju will have to face trial in US courts. I guess that's part of being a listed company on US stock exchanges.
I'm all for him being trialled in US courts provided that in exchange, the Indian government gets the new US government to extradite Warren Anderson to face charges in India.
Warren Anderson who? Warren Anderson was chairman of Union Carbide when the pesticide factory leaked Methyl Isocyanate in Bhopal nearly a quarter of a century ago. He currently lives in Long Island, New York.
Labels: accident, accounting, bhopal, india, satyam, scam
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Phrase of the month: "All options are open"
"All options are open" seems to be the flavour of the fortnight month. Pranab Mukherjee and AK Anthony have used it in reference to Pakistan's attitude towards taking action against various terrorist outfits.
Yesterday Prem Chand Gupta, the minister for corporate affairs, also used the same phrase when asked about the demands by institutional investors to have representation on the revamped board of Asatyam Satyam after the names of the first three directors of the revamped board were announced.
There're a few aspects of the admission by ex-chairman Ramalinga Raju about inflated cash balances and profits for the past few years that I really struck me.
- Assuming that PWC was also hand-in-glove with the ex-chairman, what were the other directors on the board doing? Can they also be accused of complicity? It is inconceivable that Ramalinga Raju and CFO Srinivas Vadlamani were the only ones to know about what was happening.
- Don't auditors (internal or external) make any effort to verify the actual position of cash balances or profits of a company? Do they just go accept what's given to them using the "Customer is always right" maxim?
- Doesn't the Andhra CM YS Rajashekara Reddy know that a board with Azim Premji, NR Narayanamurthy and S Ramadorai is, despite the credentials & integrity of the people involved, a sure case of 'conflict of interest'?
- This isn't by any stretch of imagination the first accounting scandal for corporate India. It is the first one where a company's head has owned up to cooking the books. It is entirely likely that Ramalinga Raju would have in fact got away with it had he gone through with the Maytas acquisitions.
Labels: accounting, india, satyam, scam
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