Saturday, April 11, 2015

Satyam Scam and Lessons Learned

After long legal battles, finally multi-crore infamous saga of ‘Satyam’ came to an end. CBI special court awarded 7 year Rigorous Imprisonment (RI) to Ramalinga Raju, his brother and 8 others. Apart from RI, Ramalinga Raju and his brother was also slapped with a fine of 5 crore each and eight others with 25 lakh each.

It is indeed true that Satyam Scam drastically changed the way accounting and auditing systems works in India. It also introduced so many checks and balances in the system. But, did we really fill gaps in the super-structure exposed by Satyam Scam?
  1. Why fines are so low? As far as I remember, amount involved in scam involves thousands of crores. But the total fine was just 12 crore. I think even the prosecutor might have spent more than 12 crore to prove the case. What about then shareholders? It was a nightmare and bog loss for them as well.  Fine shouldn’t have been such a small number. 
  2. I am still not clear whether independent directors in company boards are doing or able to do the job they are supposed to do. 
  3. FTIL and other scams indicates that cooking up books and dubious transactions are still there. What we are going to do with that?
  4. What about whistle-blower system? Do we provide enough incentive and protection to the whistle-blower to come out and provide evidence?

Satyam scam definitely improved a lot of things. But still there are lot more things to do.


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