Posted by: Manjeet Krpalani on January 8, 2009
The Satyam saga gets murkier.
This morning brought news that Satyam chairman Ramalingam Raju was absconding with his CFO, followed by information that two American law firms representing Satyam’s ADR investors have filed legal action suits against Satyam in the US. Satyam’s interim chief executive held a press conference at the company’s headquarters, saying the senior management had no idea of such wrong-doing but will do all they can to keep the company together and cooperate with the investigating regulators. At some point the presser descended into vintage Satyam-speak i.e. obfuscation. When reporters asked about the presence of the chief financial officer, the chief exec said he was unwell, then he didn’t know, then that he has tendered his resignation - which the current interim management had not yet accepted.
But who’s out there, catching the thief? No one yet. The Securities & Exchange Board of India has sent out a ‘team’ to investigate the matter, but, says a former securities regulator, the authorities are applying the usual formula, the same they’d use for a small fraud. This one calls for bold steps, like appointing a receiver immediately under the general powers clause that the regulator can command.
Meanwhile, the Indian press is asking aggressive questions: Why hasn’t Raju been booked for fraud and arrested as yet? Where did he disappear this morning? Raju sent a message in the evening saying he was in Hyderabad, ready to “face the consequences” but is still invisible. Why did PriceWaterhouseCoopers, Satyam’s auditors, sign off on Satyam’s fictitious accounts? Should’nt it be scrutinized and banned from further business in India immediately?
As if Satyam isn’t bad enough, there’s a fuel and transport strike on across India. The trucking unions want a Rs. 10 drop in the price of diesel, deduction in taxes especially toll taxes, reduction in national permit fees, lower interest on truck finance, etc. The bureaucrats in the oil and refining companies in India want higher salaries, so they are not dispatching petroleum; plus they don’t have a lot of storage capacity.
Consequently, gas stations across the country have long queues of cars waiting to fill up, and in the cities especially Delhi, daily life is already affected with office-goers stranded. Flights are grounded, and power will surely be affected.