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(A)Sathyam Fiasco: Ramalinga Raju is More Efficient than the Lakshar-e-Taiba

Discussion in 'Wednesdays with Varalotti' started by varalotti, Jan 8, 2009.

  1. Shanvy

    Shanvy IL Hall of Fame

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    Sridhar,

    Just as i finished posting, i switched on the news, and I hear there is not going to be any bail out by the government, though it has said it will ensure the future of the employees.
    (with the election coming, government will definitely think twice about it i suppose)

    May be it is still viable as mr.karnik has said in an interview...

    Shares of satyam have again dived southwards... and a company which boasted of $7billion and still rearing to go some 7/8 months back is now down to just $400million, without the even having the capacity to pay the salaries of the employees for the month of january....

    let us keep our hands joined in prayer...
     
  2. varalotti

    varalotti IL Hall of Fame

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    Thanks,Shanthi on the update. I also saw the news. The Industries Minister categorically denied about any bail-out package to Satyam.

    In my opinion it will open a Pandora's box. It is not simply in the scheme of things that the Government should help sick companies, and especially companies which are hit by fraud. But the minister has assured that the Government will do its best to protect the interests of employees within its framework.
     
  3. varalotti

    varalotti IL Hall of Fame

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    The First Silver Lining

    I am able to see the first Silver Lining in the black clouds that surround Satyam.

    The company has paid health insurance premium for its employees in the US. The payment estimated to be in the range of US $ 30million (Rs. 138 crores) came from company's own resources And has brought the first sense of relief to the employees.

    People now believe that after all Satyam's receivables stated at Rs.1100 crores might be true.

    But this alone is not sufficient to give any relief as of now. Let us continue to keep our hands folded in prayer.
    love,
    sridhar

     
  4. sowminivibu

    sowminivibu Silver IL'ite

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    Its such a sad story for India and to all the satyam employees...We will pray hard for those poor people who havent done anything but should face all the suffering !!!

    lov
    sowmi
     
  5. varalotti

    varalotti IL Hall of Fame

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    Most Gracious ILites,

    A very interesting power point presentation is doing rounds among us, the CAs in India.

    It tells how mean are the Big Four. (I have started calling them the Mean Four) And it raises many pertinent issues.

    Of course it is meant only for us CAs. But considering this fiasco, considering the role the Big Four might play in your company, your industry or your life, it is important that you see it.

    If your blood boils and you get sweating after seeing this presentation, well, don't blame varalotti then.

    Take care and here you go.
    love,
    sridhar
     

    Attached Files:

    Last edited: Jan 15, 2009
  6. AGR

    AGR Bronze IL'ite

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    Dear Sridharji

    Saw the PPT. But I dont think I can fully agree with this......The Big 4 do have their own advantages, beacuse of which Big companies prefer them for audit....and of course dont forget about the job oppurtunity for so many Indians....even the partners of Big 4 firms in India are Indians.......They surely have got better audit tool....has the advantage of operating in various countires and hence the knowledge pool......by no mean am I demeaning India Firms....but appointing a Big 4 has its own advantages......of course expensive...no doubt......When we ask a question to a consultant outside India we are charges for the time they spend in talking to us.....minute by minute I would say....so when this is happening everywhere in the world why not India......and when it comes to advising the client to cook up the books all the accountants are Indians irrespective of a Big 4 Accountant or a local Accountant......I am not supporting Big 4 but at the same time not against it as well......
     
  7. kripa shankari

    kripa shankari New IL'ite

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    hi sri
    loved ur take on satyam.
    the guy has enough to get him bailed out of this scam .
    but what about the lower levels.
    i partclrly know of a 50 year old person who switched to satyam just 2 yrs ago.
    he has 2 kidsstudying and he is the sole bread winner.
    god or time is the only saviour.
    luv
    kripa
     
  8. varalotti

    varalotti IL Hall of Fame

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    Dear AGRji,
    When it comes to accounting firms there are good fish and bad ones as it happens in every trade and profession. But when the bad professional is big and you don't know who is really in power then yes, you are in problem.

    Many senior chartered accountants think that the Big Four firms are not actually owned by professionals. And some vested interests control them. Why should all of them be headquartered in a tax haven? Not exactly to save tax as we may be naively led to think. It is to hide the ownership.

    And AGRji just have a look at the kind of lapses listed in the presentation. They are not genuine judgment errors. But active participation in fraud. We saw it in Enron, Barings Bank, WorldComm and now in Satyam. The accounts of Infosys are being audited by BSR & Co a leading CA firm, larger than PwC India in terms of their billing. Why should they give the assignment to KPMG and Deloitte who don't even have a licence to practise in India?

    I known how the Big Four work. I have not directly worked with them. But thanks to my long years in the profession I know how they handle an assignment and how they bill. And what kind of practices they indulge in. One thing I can say for sure they are not culturally suited for India.

    May God save our country!
    love,
    sridhar

     
    Last edited: Jan 18, 2009
  9. varalotti

    varalotti IL Hall of Fame

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    hi kripa,
    nice to see you here. I know how precious is the time to rest for a young mother. And you chose to spend that time reading this post.. well I am honoured, Kripa.
    I have been studying the fiasco for the past one week. I agree with you about the sufferings of the employees at lower levels. But if Government comes forward to bail out because of the employees, then we will soon receive ten thousand petitions from Thiruppur where many small units were closed down due to the economic downturn. And unlike the Satyam bosses their bosses did not fudge their accounts. And unlike Satyam employees they were not earning in lakhs. The salaries were as poor as Rs. 3000 per month. If Government bails out Satyam then it has a greater responsibility to bail out the Thiruppur units.
    We can ask some IT experts to slice out the Operations of Satyam and make them into several lots. And then ask the other IT majors to take over the business, customers and the employees as one package.
    Let's see what the new Board is going to do.
    Take care Kripa. How's the little princess doing?
    love,
    sridhar
     

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