Well, first the data you need. Rs 7136 crores addded to books with no accompanying transactions. Just extra revenues and extra profits from these non existent revenues; a non existent personal loan of Rs 1236 crores and non existent cash of Rs 5000 crores on assets. Added revenues of 588 cr in Sep Qtr which could not withstand preliminary due diligence. And to quote the Ramu Raju of the piece, no one knew about it. A plain shame.

None the less, though industry experts come out with Satyam is not representative of India, that is just not true. This is happening everywhere, just a blind eye to the Financials that compromises the best of analysts and market-makers. Criminal concerted planned breakdown of a global systemic disease that is keeping our hopes live for the next corner. Reform that is inordinately delayed and hanging a damocles sword over working professionals.

Satyam’s cash value would now be more like $250 m for just the real estate and the employee roster. And $255m in secured loans. and the liabilities are not going to be transferred to the client roster. At least I would not recommend it. CLSA’s valuation of post diligence breakdown at 600 m seems way off the mark. JPM and Credit Suisse reactions are better. The markets have reacted worse than expected. For stocks outside Satyam, huge falls raise questionsof faith that are representative of the lack of faith that pulls India down.

And when the totem poles of reform like ICICI Bank or institutions like Fidelity cannot do even a semblance of due diligence before investing it is really a question mark on corporate governance at these institutions. And KPMGs and E&Ys and the other Top 20 auditors who have failed once in 2000 and once again in 2008. A shame!

An undue prolongation of the shame that is evident at Enron, GM Ford and now Satyam and a few more. Atleast we have the processes and the structure to discover them and withstand them. I doubt a China and a Russia have even a remote modicum of the process and the regulation. I doubt if the servicing It companies and the users that are even Whistleblowers are doing even remotely enough to make this world a livable one. Nonetheless, one step at a time we will get there.

BAC and Citi also have agreed to cut executive bonuses. It’s a good start to 2009.

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