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Showing posts from January, 2009

Board Ineffectiveness

The events at Satyam Computer Services are an outcome of a total break-down in controls and more importantly, personal values. They are, in the least, a sad reflection of incompetence by a supposedly eminent board of directors and possibly, even wilful oversight. The Satyam saga demonstrates how easy it is for a high profile public limited company to commit fraud and effectively deprive public shareholders of millions of dollars of their invested fortune. Ramalinga Raju, Satyam’s erstwhile Chairman, declared in his letter to the board that the company had for several years misreported profits, a claim somewhat hard to swallow. The enormity of the sums in question would have made this quite impossible to achieve. Bank statements, deposit certificates or investment portfolio records are a simple indicator of a company’s cash reserves. The signing partner of the company’s auditors PricewaterhouseCoopers was either an integral part of a sinister conspiracy or incompetent to a degree hard