April 21, 2010

Economics: Satyam scam good for corporate governance?

Dear Friends,

As I specified in the earlier post, "Why I Decided to Blog?" am back with my first write up. The aim of this blog is to encourage healthy discussions, so why not get started straight away.

Economic Times Reports:

Institute of Chartered Accountants of India(ICAI) believes that Satyam scam is among the best things that could happen as in near future it would improve corporate governance. ICAI is the apex body of chartered accountants in India and a statement of this effect on its part carries a lot of importance. The body believes that Satyam has now become a case study which would help in controlling frauds.

Well that's what ICAI has to say, but my personal view on the matter is that the scam was handled very effectively. In a matter of hours govenment decided to save the company. Indeed the scam hurt the image of India Inc. but the way things have shaped up is quite appreciative. Now for the matter of corporate governance, yes Satyam will eventually be a case study, but it also exposes the possibilities a director can explore for meeting his vested interests. This is in a way similar to the recent recession, whatever happened was bad and may be we have learnt our lessons but does this mean that we won't have an economic slowdown again? Certainly not. We had a great recession in 1930s, didn't we have one more?

What do you think, can there be another Satyam? Was the government right in intervening?

Awaiting your responses and comments.


With lots of love
Atul Mishra

1 comment:

  1. I think satyam scam is a open deal done vit politicians b'caz all the investments he made with that money is on govt lands so i belive that itz compleat a corp game b'caz during the time of investments all his partners gave him support but due to some shares problem they had made it a issue andd pointed one as a hole govt tried to handle the issue just by issuing the non bailable warrant no spl reports are submited till now only investigation is going on till now...

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