atyam fraud unfolded and so were the inherent weaknesses of Corporate Governance in India.
Ramalinga Raju, once a posture boy of India’s growing
software sector who could find a seatbeside Bill Clinton on the dais, has become a villain in the corporate world for valid reasons.His emotionally charged four and half page letter of startling revelations shook the entirecorporate world when he admitted of cooking the account and inflating the figure by Rupees5040 crore. This scam is being equated with Enron of USA because here also the scam wasorchestrated by its Auditor, Arthur Anderson, in Satyam, Price Waterhouse cooper.By the end of the 20th century, Satyam computers had made a name for itself on the globe andhad emerged as the 4
largest software in the country. The meteoric rise of the company can besubstantiated by the fact that it was established in 1987 as private company and got listed byBSE in 1991. In 2001 its share was listed in NYSE and in 2004 it made its place in Europeanstock market.
According to company’s statement, its revenue exceeds
to 2 bn USD in 2008.
Similarly Raju’s son’s companies also were moving with
leaps and bound. Maytas infra got theambitious Metro projects and bagged many tenders including one of construction of TechnologyPark.
CORPORATE GOVERNANCE IN INDIA- REALITY AFTER SATYAM SCAM
Interestingly Satyam has bagged
Golden Peacock award for best corporate governance
by WorldCouncil for Corporate Governance only a few
years ago. The scam has raised many doubts aboutthe
class of corporate governance in India. While speaking
at a seminar on corporate governanceorganized by CII,
Ministry of Company affairs and National foundation of
corporate governance,C.B.Bhave, the chairman of SEBI
said on 6th February, 2009 that the corporate
governance is anongoing process. There is a
retrospection everywhere that some concrete steps
with respect to itshould be done.
There are few importance elements of corporate governance namely Auditing, IndependentDirectors, Regulators and Finally the Board including CEO itself. If we examine theseconstituents one by one, it would be crystal clear that all the constituents either failed or did notact as was required.