Lots might already be written about Satyam. But what bothers me is that how does one manage to show so much of cash in the balance sheets. What were the auditors seeing while the cash balance was increasing. Satyam was not selling vegetables or running a restaurant for it to accumulate such cash. Anybody aware of the financial's will know that the cash balance is normally tallied with the bank withdrawals.
So now we come to the point of if the cash was infact shown against withdrawals then the fact is that the funds were there. And if they were there where are they now. Maytas Infra has been awarded major contracts including the prestigious Metro and Airport development. Such contracts in India are not without their normal kickbacks. With big leaps in financial's, come bigger kickbacks, and bigger kickbacks, means bigger outflow of cash. I am not saying that the entire cash has gone in kickbacks, maybe some has been siphoned off by the promoters. But then to handle such outflow of cash, is always not easy, when the markets are going through a recession. In a running market, its very easy.In 2002 , Modi Xerox had put up its hands, when its bribes against the rate contract it had received had inflated its cash balance.
So what is the fact now with Satyam. I am not ready to believe its in loss. I am not ready to believe its has worked on nominal margins. Raju has said was like riding a tiger, I am saying, Raju himself is the tiger who has eaten up a major chunk along with certain officials. The question is who is going to put his arm in the tigers throat to know the true Satya(m).
did u know:
ReplyDelete1. Chandrababu Naidu & YSR Reddy r both blaming & pulling fingers at each others for this fiasco. Naidu introduced Raju as India's business face to Bill CLinton & Bill Gates. YSR Reddy awarded all major infrastrucure contracts to Maytas. Doesnt that show big politics & corporates nexus.
2. What about the timing of the news & letter. When all thought nifty would break 3200 they explode this bomb by shorting all their positions.
3. When Maytas deal fell thro, experts after experts wrote to PM, FM & other ministries to investigate the matter before the scandal took enormous proportions but who would listen.
4. If PWC comes out & says they knew about it then they r in very big trouble & if they say they had no clue then i dont know of bigger donkeys than them & they dont deserve to be called auditers & rather be called the donkey brigade.
5. Someone said there r 4 kinds of ppl involved with satyam now - the culprits, the employees, the investors & lastley the scavengers. I guess majority of us belong to the last category.
6. Finally advise for investors - never put all ur eggs in one basket pls.
One more point about PWC, it was also involved in auditing of Global Trust Bank, and there was serious over looking of Non Performing Assets. No action was taken on the auditors then, and again this time, it remains to be seen what action is taken.
ReplyDeleteWhat is surprising also is that PWC is allowed to practice in India. Can countries not make stricter laws and ensure the normal investor is protected?
ReplyDeletePeople like Raju should be paraded on the streets, not allowed to have lawyers represent him and his property completly seized.