01-13-2009, 06:11 AM
<!--QuoteBegin-Bodhi+Jan 13 2009, 09:52 AM-->QUOTE(Bodhi @ Jan 13 2009, 09:52 AM)<!--QuoteEBegin-->this also shows your inability to see the scandal's attributes through what it really is. It is not about overbilling customer or underdeploying the skills, or inappropriae practices in sales cycle, or anything to do in fact with operations. It is simply to do with syphoning off of the reserves to fund the personal real estate of Raju through blessings of kangress. True, bribe was and is often used to get contracts in America, but that is the american way. Remember Enron and Dabhol Power Project in Maharashtra? Remember Citicorp in Japan? Remember Oracle bribing the state govt officials of CA?
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Raju disclosure came as he was over a prep ice and had no options so he took ownership. But what remains to be seen is that a vast majority of the section in the industry have replicated this trend from last one decade which are not listed and those who are listed may have window dressed it so cleverly that the RBI cannot object as it is routed via the Wholly owned subsidiary routing or the double taxation avoidance routing.
Almost all of these factors actually were riding the wave of the IT BOOM and made their way out using the 10 years tax holiday given to the IT sector
Score of funds have been stashed away at Camen Islands, Maurituis,Dubai,Singapore and HK.All these are money being siphoned off from a company that makes private placement as LTD company and then you realize that the funds were actually deposited in multiple accounts in the same bank with the same name by in a proprietorship account. On some pretext or the other its withdrawn or moved into accounts elsewhere.One fine day its reflecting on the books of account as profits earned from subsidiaries.in other words recycled profits. Projecting high growth rate.
Majority of the funds from this activity have gone into overseas account/political party funds or into real estate. This is actually one of the cause of the real estate rocketing into the sky in cities like Bangalore, Mumbai suburbs, Noida, Pune, Hyderabad and Chennai.
The city of Bangalore is now unredeemable with the kind of unrealistic price prevailing and consumated by the over indulgence of corporates
In 2006-7 the UK government closed down 768 Indian companies (LLPs) that were incorporated on the UK soil from Indian business entities only to facilitate overseas funds that would be shown at home as proceeds of bills abroad and escape Indian tax laws.They neither followed the UK laws nor the Indian laws and were a pain to the monitoring agency.
In India we have virtually a toothless monitoring policy and the CBI walks in only at the 11th hour when the situation cannot be salvaged.Namely because this doesnt happen overnight but slowly over many years and its very difficult to track the foot print
The DSQ software episode and so many other including the Sunrise Infotech Ltd case apart from Lesser known IT companies going Kaput suddenly . But the money was never recovered back to the investors
The Vini Vinc case is another scam for Rs 600 crores where the money was siphoned off and no one knew till the Chairman of the company disappeared with the public money.
Satyam scam is mind boggling and we hope that this will rectify the market mechanism back to a realistic .The eco system of investment was really damage in recent times where even an ordinary lay investor expected 4X to 6X returns on the investment . Non IT sector has been taking all the beating as normal economic dynamics of say 15% to 30% returns which otherwise would have been a great deal, were shown the thumbs down.
All this really calls for a serious realignment how we work in corporate governance so that we donât go the US way completely. We have to raise the bar of self governance and ombudsman within the organisation and not allow any more fiefdoms to emenate
As a faculty I hate to mention an Indian Enron in case studies for future MBA aspirants as it opens a pandora box and invites lots of ridicule
[right][snapback]93055[/snapback][/right]
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Raju disclosure came as he was over a prep ice and had no options so he took ownership. But what remains to be seen is that a vast majority of the section in the industry have replicated this trend from last one decade which are not listed and those who are listed may have window dressed it so cleverly that the RBI cannot object as it is routed via the Wholly owned subsidiary routing or the double taxation avoidance routing.
Almost all of these factors actually were riding the wave of the IT BOOM and made their way out using the 10 years tax holiday given to the IT sector
Score of funds have been stashed away at Camen Islands, Maurituis,Dubai,Singapore and HK.All these are money being siphoned off from a company that makes private placement as LTD company and then you realize that the funds were actually deposited in multiple accounts in the same bank with the same name by in a proprietorship account. On some pretext or the other its withdrawn or moved into accounts elsewhere.One fine day its reflecting on the books of account as profits earned from subsidiaries.in other words recycled profits. Projecting high growth rate.
Majority of the funds from this activity have gone into overseas account/political party funds or into real estate. This is actually one of the cause of the real estate rocketing into the sky in cities like Bangalore, Mumbai suburbs, Noida, Pune, Hyderabad and Chennai.
The city of Bangalore is now unredeemable with the kind of unrealistic price prevailing and consumated by the over indulgence of corporates
In 2006-7 the UK government closed down 768 Indian companies (LLPs) that were incorporated on the UK soil from Indian business entities only to facilitate overseas funds that would be shown at home as proceeds of bills abroad and escape Indian tax laws.They neither followed the UK laws nor the Indian laws and were a pain to the monitoring agency.
In India we have virtually a toothless monitoring policy and the CBI walks in only at the 11th hour when the situation cannot be salvaged.Namely because this doesnt happen overnight but slowly over many years and its very difficult to track the foot print
The DSQ software episode and so many other including the Sunrise Infotech Ltd case apart from Lesser known IT companies going Kaput suddenly . But the money was never recovered back to the investors
The Vini Vinc case is another scam for Rs 600 crores where the money was siphoned off and no one knew till the Chairman of the company disappeared with the public money.
Satyam scam is mind boggling and we hope that this will rectify the market mechanism back to a realistic .The eco system of investment was really damage in recent times where even an ordinary lay investor expected 4X to 6X returns on the investment . Non IT sector has been taking all the beating as normal economic dynamics of say 15% to 30% returns which otherwise would have been a great deal, were shown the thumbs down.
All this really calls for a serious realignment how we work in corporate governance so that we donât go the US way completely. We have to raise the bar of self governance and ombudsman within the organisation and not allow any more fiefdoms to emenate
As a faculty I hate to mention an Indian Enron in case studies for future MBA aspirants as it opens a pandora box and invites lots of ridicule