Professional Documents
Culture Documents
Accounting scandals, or corporate accounting scandals, are political and business scandals which arise
with the disclosure of misdeeds by trusted executives of large public corporations. Such misdeeds typically
involve complex methods for misusing or misdirecting funds, overstating revenues, understating
expenses, overstating the value of corporate assets or underreporting the existence of liabilities,
sometimes with the cooperation of officials in other corporations or affiliates.
It was used by investment bank Lehman Brothers three times, according to a March 2010 report by the
bankruptcy court examiner. The report stated that Lehman's auditors, E&Y, were aware of this questionable
classification. Law firm ‘Linklators’ has received unfavorable press treatment in relation to their issuance of an
English law opinion which characterized the arrangements as a true sale as opposed to a transfer by Lehman
with a charge back in favor of the transferor. The report details the use of both "repo 105" and "repo 108" which
are basically identical procedures, the first costing 5% and the second 8% of the assets exchanged. In other
words, assets valued at 100 will produce 95 in cash; assets valued at 100 will produce 92 in cash respectively.
Prof. Sapovadia, in his study, shows that in spite of there being a strong corporate governance framework and
strong legislation in India, top management sometimes violates governance norms either to favour family
members or because of jealousy among siblings. He finds that there is a lack of regulatory supervision and
inefficiency in prosecuting violators.
On 5 February 2009, the six-member board appointed by the Government of India named A. S. Murthy as the
new CEO of the firm with immediate effect. Murthy, an electrical engineer, has been with Satyam since January
1994 and was heading the Global Delivery Section before being appointed as CEO of the company. The two-day-
long board meeting also appointed Homi Khusrokhan (formerly with Tata Chemicals) and Partho Datta, a
Charted Accountant, as special advisors.