It is now clear that here is more to whole in Satyam

Friends,

B Ramalinga Raju of Satyam has surrendered before Police Commissioner, Hyderabad. The govt has superseded Satyam board and would nominate directors shortly. Raju has had thick relations with Chandra Babu Naidu (earlier Chief Minister) and also with present CM. It is now clear that here is more to whole thing than has been made known so far. The govt will now do things at a pace which will neither help the Satyam share-holders nor will uncover truth fast enough. It is apparent that attempts to deflect the attention from the real matters will be made. The first step to approach court to allow impounding the assets of Raju family has not been taken. In case crimes of such nature where public at large is to financially suffer, the first step should be to take control of monetary and others assets in possessions of the wrong-doer. Another obligation for the govt is to ensure that the company concerned suffers least as far as its business and its reputation are concerned. If the related parties have had transaction with Raju and have profited then they should be asked to surrender such ill gotten profits. I am ‘however’ sure that these measures would not be taken and only lip service will be offered to the people suffering dis-advantage.

The eventual trial of Raju will be on many counts and in the process his accomplices will also face trial. Needless to say some will face charges on account of culpable negligence. The course ahead will test the effectiveness and competence of investigating agencies, the lawyers and various govt watch dogs and regulators. Many weaknesses will come to light and will have to be addressed later. I hope there will be positive fall out in terms of better regulation, check and control of corporate world and the world of business.

This is just a case of an out of proportion play with stake-holders money. In fact share-holders are made to suffer through innumerable malpractices. The common means are to under-invoice sales and taking cuts from suppliers. The transporters and couriers serving the company are given contracts against some benefits received or receivable. In light of this it is utmost necessary for a long term investor to see the the companies they invest in have honest people and people with integrity are overseeing affairs of the company.

Nifty has shed only 47 points while European markets suffered more today. The DOW is also poorer by 116 points just now but Indian ADRs have not lost much value. This suggests that Indian equity market would start moving up shortly.

HariOm,
Krsna Khandelwal

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