Satyam Fiasco

By now everybody in the civilized world is aware of the scam that is Satyam, from beginning to the end. What was reason for such a huge failure in corporate governance? More importantly, these so-called panels that were awarding Satyam awards for corporate excellence, what were they basing their judgement on? The point here is that it is not the failure of one, but all.

The accounting firm hired by Satyam, PWC might be breathing its last; with calls for banning the firm from all across the world, the odds of them surviving this fiasco looks slim. Though, it throws an even more important question into light, should the scrutiny of the accounts be left alone to independent organizations. Would this have happened if SEBI or a company that is under SEBI was responsible for verifying the accounts. I agree, humans have a horrible vice - Greed; and there is room for corruption here as well. Certainly, the magnitude of fraud would have never reached these proportions.

Satyam has shown that SOX act is also not effective at curbing corporate frauds, being listed on the NASDAQ, the financials had to meet the US GAAP Standards and also comply with SOX requirements. If there is a will; there is a way. So much for Mr. Sarbanes and Mr. Oxley.

The need is to come up with better solutions in order to prevent such frauds from happening. The board has to be more responsible to its investors. They can't just resign claiming ignorance. Technology enables us to have unlimited access and scope. We have video conferencing, ERP systems, classified access and all this if not used for the purpose of governance; then what? Vinod Dham sits in NY and says he was not aware of the accounts books, was he aware of the cash coming into his account? What was he drawing it for? The entire board independent or not must be held accountable for this.

Mr. Raju acquits everyone in his letter; Rubbish! How can the vertical heads not know how their businesses were doing? This is just unjustifiable nonsense.

Let us see what happens? 48 hours after his confession, he has not even been arrested thanks to the political backing that Raju has. Is he just going to walk away from this?