Tuesday, 13 January 2009

Beautiful India? Satyam, the devil is in the detail...

"It’s tempting to make that mental leap amid Satyam Computer Services Ltd.’s book-cooking scandal. Ramalinga Raju is no longer the entrepreneur who built India’s fourth-biggest software maker. He’s now allegedly the nation’s answer to Jeffrey Skilling, the former Enron Corp. chief executive officer serving a 24-year prison term.

Satyam’s crisis may be more jaw-dropping than Enron’s in 2001. It’s not just the magnitude of the scam -- 53,000 employees may lose jobs compared with 5,000 at Enron -- but the simplicity.

Enron’s fraud was conducted through a labyrinth of off- balance-sheet deals and other accounting gimmicks. Accounting firm Arthur Andersen approved the company’s financial creativity and collapsed in 2002. Enron didn’t make it easy for the auditor.

Satyam’s con was impossibly transparent: The Hyderabad-based company said it had $1 billion in the bank that it didn’t."

Greed and corruption has no borders. I think this could be the worse event that India has ever known in term of social, political and economical implication in the past two decades.


Billpete002 said...

I generally don't support more government regulations, so my idea is that when something like this happens the person(s) who caused it should pay all their worth to rectify it. The whole point of punishment in courts is that the punishment is suppose to outweigh the crime - otherwise, why not commit the illegal action?

Like the current Maddoff scandal in the US, and the guy is just free to walk around etc. - if you or I stole billions of dollars we'd be in jail period. Why make exceptions?

Also, for Enron some of the people walked away with million if not billions and they only have to spend 5-15 years in prison with a nice fat back account (and the prison is a 'white collar' prison). Makes you think - why don't I just make a ponzi scheme screw people for all their worth and then just pay back a small portion of the money, jail for 5-10 years then retire with the money I stole?

HousingFinland said...

let me know if you start a ponzi scheme, as the reward is greater than the punishment... ;->

You are right, laws are made to treat better te one at the top of the pyramid and quite harshly the one in the base, the one that do the dirty work...